Optimal Rules for Defined Contribution Plans: What Can We Learn from the U.S. and Australian Pension Systems?

80 Pages Posted: 10 Jan 2013 Last revised: 9 Feb 2014

Jonathan Barry Forman

University of Oklahoma College of Law

Gordon Mackenzie

University of New South Wales - Australian Taxation Studies Program (ATAX)

Date Written: January 11, 2013

Abstract

Both the United States and Australia have multi-pillar retirement systems that include a public component and a private component. Increasingly, the private component consists of a defined contribution plan. At the outset, this paper provides an overview of the retirement systems of the U.S. and Australia. Next, this paper compares the rules governing defined contribution plans in the U.S. and Australia. In particular, this paper focuses on the rules governing the contribution, accumulation, and distribution stages; and it discusses which public policies will best help workers maximize their defined contribution plan accumulations and, consequently, the retirement income that they will eventually receive. Ultimately, this paper develops recommendations for the optimal rules for defined contribution plans in the U.S., Australia, and around the world.

Keywords: defined contribution plans, retirement, pension contributions, pension investments, superannuation

JEL Classification: G23, H55, J11, J26

Suggested Citation

Forman, Jonathan Barry and Mackenzie, Gordon, Optimal Rules for Defined Contribution Plans: What Can We Learn from the U.S. and Australian Pension Systems? (January 11, 2013). Tax Lawyer, Vol. 66, No. 3, 2013; UNSW Australian School of Business Research Paper No. 2013 TABL 1000. Available at SSRN: https://ssrn.com/abstract=1954879

Jonathan Barry Forman (Contact Author)

University of Oklahoma College of Law ( email )

300 Timberdell Road
Norman, OK 73019
United States
405-325-4779 (Phone)
405-325-0389 (Fax)

HOME PAGE: http://www.law.ou.edu/faculty/forman.shtml

Gordon Mackenzie

University of New South Wales - Australian Taxation Studies Program (ATAX) ( email )

Sydney, NSW 2052
Australia

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