Future Fund

The Future Fund was established on 3 April 2006 by the Future Fund Act 2006 (Future Fund Act). The Future Fund is a financial asset fund, set up to strengthen the Commonwealth's long-term financial position by making provision for unfunded superannuation liabilities that will become payable during a period when an ageing population is likely to place significant pressure on the Commonwealth's finances.


The Future Fund Act gives effect to the following:

  • Establishment of Government bodies: the Future Fund Board of Guardians (Future Fund Board); and the Future Fund Management Agency (Agency):
    • the Future Fund Board is accountable to the Government for the safekeeping and performance of the Australian Government Investment Funds; and
    • the Agency supports the Future Fund Board by performing operational activities associated with funds’ investments.
  • Investment Mandate: the responsible Ministers are required to issue an Investment Mandate (detailed below).
  • Crediting amounts to the Future Fund: 
  • the responsible Ministers can make credits to the Future Fund, so long as the additional amounts do not result in the balance of the Fund exceeding the Target Asset Level (detailed below). For information on the credits, refer to the Investment Performance and Financials.
  • Debiting amounts from the Future Fund: the responsible Ministers can debit (drawdown) from the Future Fund in accordance with the purposes of the Future Fund Act:
    • to discharge unfunded Commonwealth superannuation liabilities once the balance of the Future Fund is greater than or equal to the Target Asset Level, or from 1 July 2020, whichever is earlier; or,
    • meet expenses associated with the investment function and administration of the Future Fund.
  • Investment function: gives investment powers to the Future Fund Board.

Investment mandate

The responsible Ministers issued the Future Fund Investment Mandate Direction 2017 to the Future Fund Board on 15 May 2017. It requires the Future Fund Board adopt a benchmark average return for the Future Fund of “at least the Consumer Price Index (CPI) +4.0 to +5.0 per cent per annum over the long term”. In striving for this benchmark return, the Future Fund Board may pursue an acceptable, but not excessive, level of risk. The investment mandate direction is a legislative instrument that is not subject to disallowance.

Target Asset Level

The Target Asset Level is the best estimate of the Future Fund balance that would be required to offset the present value of projected unfunded superannuation liabilities, accrued up to the same point in time.

The Future Fund Act provides that a comparison of the Future Fund's balance with the Target Asset Level is required when considering whether to credit an amount to the Future Fund.

From 1 July 2020, withdrawals from the Future Fund to meet unfunded superannuation liabilities do not need to take account of the Target Asset Level.

The latest Target Asset Level Declaration of 25 June 2021 specifies and explains the target asset levels for the 2020-21 to 2023-24 financial years:

The Target Asset Level for the Future Fund is set by the Designated Actuary, who is specified in a written determination made by the nominated Minister (the Finance Minister). The Designated Actuary must take all reasonable steps to ensure that there is a Target Asset Level in place for a financial year and that not more than five target asset levels for different financial years are in place at the same time. The current Designated Actuary determination is below:

Investment performance and financials

The Future Fund Board publicly discloses the Future Fund's asset allocation and investment returns in its quarterly portfolio updates.

Financial performance since inception to 31 March 2024

$ 'millions1
Total Credits60,537
(Plus) Net Earnings2162,813
(Equals) Total Credits and Earnings223,350
(Less) Debits (Withdrawals)30
(Equals) Balance223,350

1. Data may not sum due to rounding.
2. Earnings are net of investment and administration fees incurred by the Future Fund Board.
3. This amount represents debits made for policy purposes under the relevant Act.

Quarterly performance result to 31 March 2024

Nominal ReturnsBenchmark Rate1 
 1 Year10.17.6
Annualised return since inception27.87.0

1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. Annualised return since inception on 5 May 2006, when the Fund received its initial credit.

Annual performance results

Financial year
Nominal Returns
(Per cent per annum)
Benchmark Rate1 
(Per cent per annum)
Total Balance as at 30 June
($ 'millions)

1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. Annualised figure as first contribution was made on 5 May 2006.
3. Nominal returns to 2010-11 are inclusive of Telstra holdings.

Transfers (Credits) to the Future Fund

The following table provides a history of financial transfers to the Future Fund, with links to the associated determinations.

Summary of Transfers
Total Transfers 


Source of Funds
($A m)
5 May 2006Initial Seed Capital18,000Future Fund (Crediting of initial Amount) Determination and Explanatory Statement 2006  (Explanatory Statement)
22 January 20072005-06 Budget Surplus and first instalment of Telstra 3 sale proceeds18,639Future Fund (Crediting of Additional Amounts) Determination and Explanatory Statement 2006  (Explanatory Statement)
16 February 2007The remainder of the 2005-06 Budget Surplus3,638Future Fund (Crediting of Additional Amounts) Determination and Explanatory Statement 2007  (Explanatory Statement)
28 February 20072,104,657,933 Telstra shares8,966PDF version:
Future Fund (Balance Day – Telstra Shareholding) Determination 2007 (Explanatory Statement)
22 June 2007Telstra 3 sale proceeds (prepayments of the second instalment received in the period February to April 2007)151Future Fund (Crediting of Additional Amounts) Determination and Explanatory Statement 2007 (No. 2)  (Explanatory Statement )
28 June 200721,894,459 Telstra shares102*PDF version:
Future Fund (Balance Day – Telstra Shareholding) Declaration 2007 (No. 2)  (Explanatory Statement)
24 August 20072006-07 Budget Surplus7,000Future Fund (Crediting of Additional Amounts) Determination 2007 (No. 3)   (Explanatory Statement)
25 June 2008Telstra 3 sale proceeds (second instalment receipts)3,900Future Fund (Crediting of Additional Amounts) Determination and Explanatory Statement 2008  (Explanatory Statement)
21 November 200835,361,956 Telstra shares141*PDF version:
Future Fund (Balance day – Telstra shareholding) Declaration 2008  (Explanatory Statement)

Note: *Telstra shares are valued as at the time of transfer.

Drawdown (debits) from the Future Fund

On 25 May 2017, the Government announced its decision to defer drawing down from the Future Fund until at least 2026-27.

Budget treatment of Future Fund earnings and costs

The Future Fund's gross earnings were excluded from the underlying cash balance from its establishment in 2006 until 2012-13. Gross earnings were excluded on the basis that Future Fund earnings, while accounted for as Government receipts, were not available for recurrent spending but were instead quarantined and reinvested to meet the Government’s unfunded superannuation liabilities. 

While the Future Fund’s gross earnings were excluded from the underlying cash balance, its operational costs were included in the underlying cash balance. 

In the 2012-13 Budget, the Government announced a review of the budget treatment of the Future Fund regarding the issue of whether net earnings should be excluded from the calculation of the underlying cash balance. The review questioned whether both Future Fund’s earnings and costs should be excluded from the underlying cash balance. Previously gross earnings only had been excluded.

Following consultation with stakeholders, the Government announced in the 2012-13 Mid-Year Economic and Fiscal Outlook that the Future Fund’s net earnings would be excluded from the calculation of the underlying cash balance. This was considered appropriate as the Fund’s earnings are required to be reinvested to meet future superannuation payments, and the Future Fund is required to meet all of its operating costs from its earnings. This means Future Fund earnings and costs are treated consistently in the calculation of the underlying cash balance.

As a result of this change in budget treatment, the historical series for the Australian Government fiscal aggregates was revised to account for Future Fund net earnings in the underlying cash balance.

A summary of the outcomes of the review conducted in 2012-13 is available at Budget Treatment of Future Fund Costs in the Australian Government Budget and Financial Documents.

The net earnings of the Future Fund will be included in the underlying cash balance regardless of whether drawdowns to meet unfunded superannuation liabilities have commenced at that time. 

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