The report, Ageing and Capital Flows, commissioned by the Actuaries Institute at the request from the Financial System Inquiry, indicated retirees could help Australia’s infrastructure in the coming decades.
Actuaries Institute chief executive David Bell said the report predicted superannuation assets will grow to 160 per cent by 2040 then plateau as superannuation savings enter the pension phase.
“This is a huge opportunity for the government to provide investment vehicles that can drive infrastructure development over the next three decades,” said Mr Bell.
“Retirees’ retirement assets will help reduce their reliance on the aged pension and at the same time underpin much-needed infrastructure development,” he said.
The report also found there will be a shift to more illiquid investments as the very large funds have significant and stable cash flow, but said investments in infrastructure and property will still grow.
“Recent sales of ports and freeway infrastructure have demonstrated the superannuation market’s capacity and appetite for these investment classes,” said Mr Bell.
The report explained that this will undoubtedly continue and could strengthen over this period, and as domestic demand is met, investment in these and other categories will need to expand overseas.
Mr Bell said 25 per cent of assets are currently invested overseas, but as the industry grows these allocations may increase due to limited equity investment capacity in the Australian market.
