Superannuation and asset management
Superannuation is of great importance to Australians. An increasing number will depend on it to fund their retirement, and in doing so will reduce public expenditure on the aged pension. The superannuation industry manages $2 trillion of savings, providing a major source of investment across the economy, and employing many people.
New research on the wealth of Age Pensioners
CSIRO’s Data61, Monash University, Challenger Limited and Accurium Pty Ltd, have released the first in a series of papers of new research aimed at improving the understanding of the circumstances of Australian retirees to inform government policy and assist the superannuation industry to provide products that better support Australians in retirement.
The report, “Household Assets Among Australian Age Pensioners: A preliminary analysis of data from the Department of Human Services”, is part of an Australian Research Centre Linkage Project.
Using de-identified data provided to Data61 by the Department of Human Services, the research draws on both superannuation assets and non-superannuation means testable assets. While the research does not include the value of the family home (exempt from the means test), it does include differences in means testable assets held by homeowners and renters. Importantly, the research also gives the first picture of the means testable assets of households that have no superannuation.
The findings include:
- Single households with no superannuation had median assets of $49,000 in assets such as savings, securities and other managed investments compared with a median value of $117,000 for couples in the same situation.
- Half of single households had less than $48,000 in the above non-super assets. This compares with $107,000 for couples.
- For those that did have superannuation, median values of superannuation assets were also different, with singles holding a median balance of $220,238 compared with $354,744 for couples.
- Of those whose assets were examined in the study, almost 60 per cent of singles were homeowners and 87 per cent of couples.
Zili Zhu, Research Group Leader at CSIRO’s Data61 Risk Lab said, “Data science in this field is a key pillar in informing the debate about how best to provide retirement income and revealing patterns among data sets that have previously not been considered, while ensuring information is accessed in a safe and responsible way.”
Colin O’Hare, Professor and Director of Actuarial Science at Monash University said, “The Australian superannuation system has been very successful in ensuring that the vast majority of Australians have some form of retirement savings. There has been less understanding about how that wealth is distributed amongst individuals and households and how we can now best ensure those households are supported during their retirement. This research provides the first picture of the distribution of superannuation and other assets amongst households and individuals and provides a new empirical basis for further study into current levels of adequacy of superannuation savings.”
David Cox, Head of Government Relations at Challenger added, “The research is important because it will assist superannuation funds to design retirement income products that have appropriate asset allocations which factor in retirees’ wealth and social security entitlements.”
Household Assets Among Australian Age Pensioners: A preliminary analysis of data from the Department of Human Services, Alec Stephenson, Zili Zhu, Peter Toscas, Andrew Reeson, Bonsoo Koo, Colin O’Hare, David Cox, Report Number: EP174179, June 10, 2017, CSIRO Risklab Australia.
Current CSIRO research projects range from applying behavioural economics for enhanced member engagement to developing new mathematical tools for modelling individuals’ retirement outcomes. Some of our work in this area has been delivered through the CSIRO-Monash Superannuation Research Cluster.