Australia | Melbourne Mercer Global Pension Index : Melbourne Mercer Global Pension Index


Australia


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Australia’s retirement income system comprises a means-tested age pension (paid from general government revenue); a mandatory employer contribution paid into private sector arrangements (mainly DC plans); and additional voluntary contributions from employers or employees or the self-employed paid into these private sector plans.

The overall index value for the Australian system could be increased by:

  • introducing a requirement that part of the retirement benefit must be taken as an income stream
  • increasing the labour force participation rate at older ages as life expectancies rise
  • introducing a mechanism to increase the pension age as life expectancy continues to increase
  • increasing the minimum access age to receive benefits from private pension plans so that retirement benefits is restricted to no more than five years before the age pension eligibility age.

 

RRF19921 MMGPI Report 0616 Chart WEB 1000x950 02 AUSTRALIA Australia

 Progressive Results:

Year Overall Adequacy Sustainability Integrity
2016 77.9 76.0 74.1 86.1
The Australian Index value fell from 79.6 in 2015 to 77.9 in 2016 primarily due to a reduction in the net replacement rate.
2015  79.6  81.2 72.1 87.6
The Australian index value fell slightly from 79.9 in 2014 to 79.6 in 2015 due to a number of small changes.
2014 79.9 81.2 73.0 87.8
The Australian index value increased from 77.8 in 2013 to 79.9 in 2014 primarily due to the increase in the legislated minimum contribution rate from 9% to 12% and the higher minimum pension.

2013
77.8 75.6 73.0 88.1
The Australian index value increased from 75.7 in 2012 to 77.8 in 2013 primarily due to the introduction of stronger regulatory requirements and an increase in the net replacement rate.
2012 75.7 73.5 73.0 83.2
The Australian index value increased from 75.0 in 2011 to 75.7 in 2012 primarily due to an increase in the level of pension assets and a rise in the labour force participation rate amongst those aged 55–64. The increase in the mandatory Superannuation Guarantee contribution from 9 percent to 12 percent has not yet had any impact on the index value as the transition begins from 1 July 2013.
2011 75.0 73.6 71.4 82.4
The Australian index value increased from 72.9 in 2010 to 75.0 in 2011 due primarily to a real increase in the age pension and a higher net household saving rate.
2010 72.9 68.1 71.7 82.4
The Australian index value fell slightly from 74.0 in 2009 to 72.9 in 2010 due, in part, to the inclusion of the new cost indicators in 2010 where Australia scored relatively poorly.
2009 74.0 68.1 71.0 87.8

 

Media 2016:

 Could do better: Australia given a B+ and urged to lift SG

Media 2015:

Media 2014:

 

 


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Link to Victorian Government (Victoria Online) the Mercer Australian website Australian Centre for Financial Studies