The report predicted superannuation assets will grow to 160 per cent of GDP by about 2040 then plateau as superannuation savings enter the pension phase.

Actuaries Institute chief executive David Bell said the volume of accumulated capital will change over time and so will its allocation.

“Twenty-five per cent of assets are currently invested overseas but as the industry grows it is possible these allocations may increase due to a limit in equity investment capacity in the Australian market,” Mr Bell said.

The report suggests that superannuants’ risk aversion and preference for greater capital security (possibly including some lifetime annuities) will see a shift over time to more conservative investments, which will boost demand for long-term defensive asset classes such as government and corporate bonds.

“This is a huge opportunity for the government to provide investment vehicles that can drive infrastructure development over the next three decades,” Mr Bell said.

“Recent sales of ports and freeway infrastructure have demonstrated the superannuation market’s capacity and appetite for these investment classes.

“The good news for the nation is that retirees’ retirement assets will help reduce their reliance on the age pension and at the same time underpin much-needed infrastructure development.”

The report also envisages a rationalisation of superannuation funds over the same period and it noted that any concentration of funds would lead to large holdings.

“If the top 10 funds in 30 years held 60 per cent of all assets, they would manage $300 billion each (in real terms),” Mr Bell said, adding that this market concentration is likely to raise competition concerns among policymakers.

The SMSF sector will lose its share of the overall market as its large asset base of members in the pension phase draw down their benefit during this period, the report stated.

Mr Bell said regulators will need to be vigilant that SMSFs can deliver a reliable, secure and adequate retirement income to their owners.