Australian super assets have rocketed up 17% in annual growth rate in ten years to US$1.3 trillion, or the equivalent of 96% of Australia's GDP, according to the Towers Watson Global Pension Assets Study.
Australia's solid result was attributed to its strong currency, the implementation of the mandatory Superannuation Guarantee system and a high allocation to growth assets such as equities.
"Australian funds continue to have the highest allocation to equities at 50%," said the report.
The report found that in Australia, the impact of poor asset returns and falling bond yields have generally been passed from corporate and government balance sheets to individuals due to the advent of Superannuation Guarantee.
"This approach makes greater allowance for extreme events, which are occurring more frequently, while accommodating the softer elements of risk, such as credit and liquidity. The past few years have focused attention on the multi-faceted nature of risk within our increasingly precarious financial systems," said Graeme Miller, director of investment services, Australia for Towers Watson.
"At the same time, risk management processes have evolved somewhat to factor in more qualitative measures. However, there is still some way to go before the appropriate measurement and management of risk is firmly embedded in the governance structures of most pension funds."
The report also said that Australia's high allocation towards DC funds has allowed it to avoid impact to its corporate and government balance sheets.
Meanwhile, pension fund balance sheets weakened globally during 2011 despite a growth in assets to US$28 trillion, up $2 trillion from 2010.
According to the study, pension assets now amount to 72% of global GDP, down from 76% in 2010, with the US, Japan and the UK the largest pension markets in the world. They account for 59%, 12% and 9% respectively of total pension fund assets globally.