“The current low interest rate environment has continued to prevail for more than five years and is now arguably ‘the new normal’ in the local economy,” the report stated.

“Given that there are no maximum constraints on the pace of members drawing down their benefits in retirement, if retirees are forced to draw down greater than expected proportions of their retirement savings to meet their needs in a low return environment, then the projected asset growth to more than $10 trillion would slow and, commensurately, the call on the government for the age pension would be greater.”

The report noted that the growth of the SMSF sector could be particularly inhibited by the government’s 2017 super changes, which saw the introduction of the transfer balance cap, meaning members could only have $1.6 million of assets in the pension phase of their fund.

“In retirement, many SMSFs will have retirement phase income streams which are eligible for tax exemptions on investment returns, as well as unpreserved monies remaining in accumulation accounts which are not subject to any drawdown requirements and are freely available to be withdrawn by members as and when they see fit,” the report said.

It noted that the phenomenon of drawdowns exceeding contributions was likely to occur across the super sector over the next 10 years, as predicted take-up of post-retirement income streams was expected to be low.

However, total assets in the SMSF sector were predicted to continue to exceed assets in both the industry and retail super sectors, growing to almost $3 trillion by 2038.