The self-managed super fund (SMSF) segment will decline from 31.9 per cent of the market in 2010 to 22 per cent of the market in 2025, Rice Warner Actuaries has predicted.
The annual Superannuation Market Projections Report said while the SMSF segment had grown by 1 per cent over the last year, it would gradually decline due to lower sizes of newly formed plans, contribution caps and winding up of plans as the current generation of retirees in these arrangements "dies off".
Rice Warner Actuaries predicted that the commercial funds sector would, on the other hand, grow from 30.8 per cent of the market in 2010 to 33.7 per cent of the market in 2025.
Meanwhile, the real winner according to the report will be the not-for-profit funds, which Rice Warner Actuaries is predicting will grow from 37.3 per cent to 44.6 per cent in 2025.
Overall, the total superannuation market was expected to grow from roughly $1.2 trillion in 2010 to $2.9 trillion in 2025, Rice Warner Actuaries said.
According to the group, the big impacts on the industry had been the continuation of fund mergers driven by a desire to generate economies of scale and the announcement of the Future of Financial Advice (FOFA) reform package, which would remove the cost of financial advice from the retail product range.
Other impacts were the continued debate about retirement adequacy, with Labor's bold initiative to move the super guarantee from 9 per cent to 12 per cent over the next decade, and the release of the Cooper review with its 177 recommendations for change.
The annual Superannuation Market Projections Report, which projects the assets and membership of superannuation into the future following a set of detailed assumptions, is compiled based on current statistics and Rice Warner Actuaries' analysis and interpretation of likely market trends.
