Nearly four-fifths of teenagers who open a superannuation account do so at an industry fund, while less than 20 per cent go into a retirement scheme managed by a bank or listed wealth company.
Just over half of adults in their mid-20s open new accounts with industry funds, against 35 per cent who go to retail super funds. The estimates by actuarial firm Rice Warner underpin retail funds' ongoing battle to remove super from industrial awards.
Industry funds attract a high proportion of young employees largely because they are listed in industrial awards, so the retirement savings of individuals who have no interest in super are automatically managed by a select group of funds that are named in the agreements.
Rice Warner predicts that over time the proportion of new accounts being set up by 15 year olds at industry funds will fall to 75 per cent from 77.7 per cent, although the proportion of 25-year olds who open industry fund accounts will decline by less. Banks and wealth companies are expected to gain market share over time, particularly as they market cheap, no-frills savings products to existing customers.
"The banks are especially marketing [super products] more directly to consumers," Rice Warner consultant Nathan Bonarius said.
Retail super funds have long wanted to crack open the system so that all providers of standard MySuper retirement products be put on the same footing and have equal access to savers.
The Productivity Commission is considering throwing out the existing default super fund rules and is examining options, including a system to increase competition.
The Rice Warner report, expected to be published this week, predicts that industry and retail funds will raise their share of Australia's super sector over the next 15 years, partly at the expense of self-managed schemes.
The actuarial firm forecasts self-managed super funds' share of the retirement savings market, which is expected to double to $4.2 trillion by 2031, will decrease to 27.5 per cent from 29.5 per cent. The expected fall is blamed on new rules that limit the amount of money savers can contribute to super voluntarily, as well as the ageing of members. Self-managed super fund members tend to be older and more likely to be drawing down their savings.
"You can't build up as a big a fund as you used to be able to," Mr Bonarius said. Some financial advisers have suggested that savers should re-think their plans to start a self-managed super fund on the grounds that if the account balances are smaller, they become more expensive to run.
Rice Warner predicts that by 2021 there will be 19 not-for-profit funds with assets of more than $10 billion. Some 13 funds will still have assets of less than $1 billion.
