Much of this paper’s comprehensive analysis of the distribution of superannuation contributions updates and confirms previous studies. For instance, how contributions’ rise with age; but some key findings are worth emphasising.
We find that the persons with little or no employer support who claim an income tax deduction for their contributions to superannuation are generally making greater provision for retirement than those with employer support, particularly women.
The Government Co-Contribution provides larger benefits to women than men and the proportion of women in receipt of a Government Co-Contribution is generally higher than that of men. The outcome reflects the generally higher numbers of women in the Government Co-Contribution total income ranges and the numbers making a non-concessional contribution.
We find superannuation coverage generally increases with total income but peaks and then declines across age ranges.
The results from the updated RIMGROUP projections provide a level of disaggregation and detail that has rarely been published. The finding that (contribution) inflows are projected to be a relatively flat 5 per cent of GDP has potential implications for financial markets. Similarly the finding that projected superannuation assets continue to rise as a proportion of GDP from around 100 per cent to just under 150 per cent is significant27.
Notwithstanding this strong projected growth, the Rice Warner aggregate projections for 2020 only are almost 50 per cent higher than the corresponding RIMGROUP projections; KPMG projections for 2017 are quite close to Rice Warner’s. At this time the reasons for these differences are not known — all such projections require many assumptions but the difference is too large to be accounted for by a simple difference of say, one percentage point, in superannuation returns.
A number of projections all confirm that the relative position of women in the superannuation system should improve over time. For example the relative average assets of women compared with men are projected to rise from 63 to 75 percent. Considering that we know women have lower participation rates, more part-time work, and lower average wages associated with different occupational composition, the 75 per cent finding can be taken as quite positive. A similar picture can be found in comparing growth in payouts for women with those of men; these projections indicate that women’s age retirement payouts in 2040-41 are 2.2 times those in 2010-11 in real terms, while the corresponding ratio is 1.7 for men.
However the strong differences in superannuation holdings by income decile (within gender) appear to be largely locked in and in some cases widened over time. This result reflects the strong continuing differences in voluntary saving by income level.
27 A similar finding was published in the 2007 Intergenerational Report based on an earlier version of RIMGROUP and the then projection of GDP.