John and Beverly Marsden are pictured in a citrus grove at their Glenorie home on the rural northern outskirts of Sydney, May 21, 2014. Australia's pioneering A$1.7 trillion 'super industry' - bigger than the country's annual economic output - provides more than A$72 billion a year in retirement funds and it's held up as a model for other developed countries. But the industry is plagued by high fees and a narrow range of products for retirees to invest their savings in.
Superannuation, as it’s called Down Under, oversees around A$3.5 trillion in assets, per regulatory data from the end of March, dwarfing the A$2.5 trillion combined market value of companies listed on the Australian Stock Exchange. It’s one of the top-five pools of retirement savings on the planet, according to OECD data. Not bad for a nation which ranks 55th by population.
More of that cash is being deployed abroad, helping turn Australia into a net exporter of capital over the past decade. Some 40% of the A$2.4 trillion managed by institutions is in overseas stocks and bonds, data from the Australian Prudential Regulation Authority show. The pension funds are also channelling cash into unlisted investments. AustralianSuper owns 70% of Coal Drops Yard, a new development next to London’s King’s Cross Station, courtesy of a A$1.3 billion investment.
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