A global survey by Watson Wyatt has found Australian superannuation funds continue to experience the highest long-term growth rate, despite the contraction of global assets worldwide.
Australian superannuation fund assets fell by around 2 per cent last year, decreasing to $1,036 billion at the end of 2008, according to the study.
However, Watson Wyatt said the contraction contrasts to an average 10-year pension asset growth rate of 12 per cent per annum for Australian superannuation fund assets, which remains the highest growth rate experienced by 11 of the largest global pension markets.
“What we’re seeing around the world is a decrease in pension assets relative to both GDP, and particularly overseas, the liability to pay pensions,” Watson Wyatt head of client consulting Martin Goss told InvestorDaily.
“However, Australia is increasing its share of global pensions which just shows Australia has been leading the way in basically covering its pensions.”
Australia is far more weighted to defined contributions compared to other countries, Goss said.
“A lot of places around the world have defined benefits, but the rest of the world is moving in our direction,” he said.
“Australia has been at the forefront for developing best practice and is a model for defined accumulation funds, so other countries around the world are learning from us.”
Australian superannuation funds along with other pension funds in the US, UK and Canada have taken on more investment risk compared to other countries, Goss said.
“But over the longer-term they have been rewarded for it, despite this market downturn,” he said.
