Australian superannuation industry overview

After a challenging period, the superannuation sector and individual funds need to look forward.

2020 and 2021 saw superannuation funds implementing multiple, significant pieces of legislation – Member Outcomes, DDO, Your Future, Your Super – whilst operating under and responding to the unique and protracted implications of the COVID-19 pandemic. Many funds met this challenge whilst simultaneously involved in merger discussions and activities.

The Your Future, Your Super legislation – in particular stapling and the Annual Performance Test – will continue to put pressure on a segment of the sector and result in further consolidation, while continuing funds need to look forward to meet their current and future member needs.

With a significant portion (approximately 20 percent for the Super Insights population, excluding SMSFs) of total member benefits now in the retirement phase, the requirements of the Retirement Incomes Covenant formalises the need to develop strategies which will deliver to members approaching and in retirement.

To succeed in retention and growth of this segment of the membership, funds will need to increase their access to data as an input to robust cohort identification and analysis. Trustees need to understand the outcomes of retirement products and include the provision of advice and guidance to members in order to develop fit for purpose strategies.

Funds need to also cater for key developments and trends in member expectations of their superannuation funds, including in relation to ESG and funds’ responses to climate change, expectations around digital and other forms of communications and services including expectations around the personalisation of a member’s interaction with their fund. All strategies to meet these demands need to be delivered in the context of increased regulatory scrutiny and the overarching requirement to act in members’ best financial interests.

Sector performance and dashboard

At the top end of the sector, based on 30 June 2021 data, the 13 funds with net assets above $50 billion held 75 percent of the total net assets (excluding SMSFs) and 78 percent of members.

Recoveries in markets as well as increases in contribution levels saw the industry fund sector overtaking the SMSF sector for the first time, holding 31.2 percent of net assets versus 29.4 percent for SMSFs.

In terms of key metrics over 2020/21 – the retail sector saw particularly significant increases (44 percent) in the average member contribution per active, pre-retirement member, experienced increases in operating costs (partly driven by the closure of ERFs) but at the same time experienced a 17 percent reduction in MySuper administration fees. The industry fund sector, however, saw a marginal increase in operating costs but marginal decrease in MySuper administration fees. These and other metrics can be explored in the Dashboard, which includes a number of new views.


The KPMG Super Insights Dashboard presents analysis based on a combination of leading analytics applied to 18 years of APRA and ATO-published statistics.

Developed by our data and analytics team, the Dashboard is supported by insights from our asset and wealth management specialists.

View the Super Insights 2022 Interactive Dashboard >



Key issues and trends within the superannuation industry

Funds that continue to look forward, and successfully refresh and develop their strategies to meet continually emerging themes will reap the rewards of delivering against the ultimate purpose of the superannuation sector – to deliver retirement outcomes to their members. 

KPMG will be exploring the following topics in greater detail. Subscribe to Superannuation Insights to keep up-to-date.

The industry has moved beyond simply viewing ESG as a risk and compliance tool and instead considers it in terms of value creation for all stakeholders. Explore how implementing ESG and sustainable investing is a journey that encompasses considerations for a whole of business strategy, member retention and social licence, amongst other things.

What superannuation funds need to consider to stay on top of their ‘tax game’ - ranging from the ATO’s ‘Justified Trust’ initiative, governance and controls over third-party tax data, tax matters relating to fund mergers and the retirement income covenant to considering the future of the tax function.

Effective board and senior management oversight are essential to sound and effective financial crime risk management – explore recent developments in mandatory breach, anti-money laundering, fraud, bribery and corruption, whistleblowing and sanctions.

What superannuation funds need to consider to ensure that their investment operations stay abreast of industry changes and can benefit from the continued growth in the superannuation system.

Super fund members were unnerved by the COVID-induced market meltdown starting in February 2020. From peak to trough the Australian market shed 36 percent in just 22 trading days, and global markets fared little better. Many members switched out of growth options into cash, what were the consequences of those actions for members?

A discussion on APRA’s focus on improvements to the implementation of SPS 515 Strategic Planning and Member Outcomes, Members Best Financial Interests (MBFID), product underperformance and the Retirement Income Strategy (RIS). Noting that ASIC sees DDO as the crown in their regulatory toolbox, we focus on ASIC’s emphasis on Insurance in Super, the Internal Dispute Resolution (IDR) Framework, disclosure and communication as well as the Financial Accountability Regime (FAR) and the New Breach Reporting Laws.

A view that early assessment and mitigation of privacy risk is key and that funds should adopt a Privacy by Design (PbD) approach and conduct Privacy Impact Assessments (PIAs) at the design stage of the technology solution to address key privacy risk consideration is explored.

What technology leaders should consider to ensure that their investment in the fund’s future data and digital capabilities pay off as the consolidation in the superannuation fund sector continues at pace. Many fund executive management teams are asking their technology teams to increase their investment and efforts in digital and data capabilities to make certain the fund is prepared to harness the value and synergies of the merged entity.

What is most effective in identifying the purpose and sources as well as management and deployment of capital and reserve categories required in the superannuation industry?

We present a holistic and dynamic approach to capital management and reserving that is tailored to the individual risk profile and appetite of a fund and that abides by a set of key principles.

Member-centric operating models remain highly relevant and commanding in the face of unceasing regulatory demands, escalating member expectations and pressures to reduce costs and increase platform agility and resilience. Discover the four key capabilities and how they contribute to breaking down cross-functional silos and to building journey-based squads that focus their attention on clearly defined member needs and wants, customer pain points and value creation.

The recent law reforms impacting the member best financial interest duty (including reversal of evidentiary onus of proof), indemnities and penalties, the need for trustees to raise capital in their own (corporate) capacity as well as the Financial Accountability Regime (FAR) bill, and show what trustees need to consider to comply with these reforms are overviewed.

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