Facing the pensions challenge: Lessons from Australia
A major long-term challenge facing modern economies is how to pay for the living expenses and care costs of the elderly. Universal state provision for pensions and long term care is now beyond the realistic capabilities of most countries. Australia recognised this some thirty years ago, and introduced compulsory ‘Superannuation Contributions’ in 1991. These, now 9.5% of earnings, are deducted from wages and salaries by employers. Since their introduction, funds in excess of A$2,000 billion (about £1,200 billion) have been accumulated in a mixture of public, industry, retail and self-managed funds. These assets are held in ‘Defined Contribution’ schemes, so that the risks of inappropriate funds management are borne entirely by the members. The management of these funds has not been a success. An unnecessarily complex and expensive industry has developed, supervised by multiple and overlapping agencies, and governed by trustees who provide inadequate oversight. The result has been a significant reduction in the funds available to support retirement, and a very large transfer of wealth from Australian fund members to those who own and run the industry. In this seminar, Nicholas will describe how the Australian system developed, quantify the funds shortfall; and compare the Australian system with international benchmarks. He will also draw out the lessons which the Australian experience provides for other countries – such the UK – as they shift towards greater reliance on personal Defined Contribution arrangements.
Date: 1 May 2017, 17:00 (Monday, 2nd week, Trinity 2017)
Venue: Balliol College, Broad Street OX1 3BJ
Venue Details: Old Common Room
Speaker: Nicholas Morris (University of New South Wales, Sydney)
Organising department: European Studies Centre
Organiser: Julie Adams (St Antony's College, University of Oxford)
Organiser contact email address: julie.adams@sant.ox.ac.uk
Host: David Vines (Balliol College, University of Oxford)
Part of: Political Economy of Financial Markets (PEFM)
Booking required?: Not required
Audience: Public
Editor: Julie Adams