Australian pension funds are going against the grain of pension funds in other countries within the Organisation for Economic Co-operation and Development (OECD) by holding a higher percentage of equities with low exposure to bonds.
The OECD’s Pension Markets in Focus report found that Australia (like the United States, Chile and Finland) has between 40 and 50 per cent of its pension fund assets in equities, while the majority of other OECD countries appear to favour bonds.
The report also showed pension funds posting a positive net return on investment of 2.7 in 2010, as they slowly climbed back to pre-global financial crisis levels.
While Australia performed above average, it did not make the cut of the top pension fund performers, with New Zealand (10.3 per cent), Chile (10 per cent), Finland (8.9 per cent) and Canada (8.5 per cent) taking the top spots.
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.