The Australian Retirement Income System: Comparisons with and Lessons for the United States

24 Pages Posted: 14 Nov 2014 Last revised: 17 Dec 2014

See all articles by Rafal Chomik

Rafal Chomik

University of New South Wales (UNSW)

John Piggott

University of New South Wales (UNSW) - Australian School of Business, School of Economics

Date Written: September 1, 2014

Abstract

Australia has an atypical retirement income system: it comprises a flat-rate, non-contributory, affluence-tested age pension, and a mandatory, defined contribution accumulation plan to which employers must contribute 9.25 percent (moving to 12 percent) of wages on behalf of their employees. We briefly compare the Australian and US economies and demographies, and then describe the Australian arrangements and assess its econ efficiency and efficacy in delivering retirement support. We focus especially on the means testing of the first pillar in Australia and the mandated membership of pre-funded private pension plans. We conclude by considering insights for the evolution of the US pension reform debate as demographic change unfolds.

Keywords: Social Security, pensions, means testing

Suggested Citation

Chomik, Rafal and Piggott, John, The Australian Retirement Income System: Comparisons with and Lessons for the United States (September 1, 2014). Pension Research Council WP 2014-17. Available at SSRN: https://ssrn.com/abstract=2523539 or http://dx.doi.org/10.2139/ssrn.2523539

Rafal Chomik

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

John Piggott (Contact Author)

University of New South Wales (UNSW) - Australian School of Business, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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