Wharton Pension Research Council Working Papers
 

Title

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

Document Type

Working Paper

Date of this Version

9-1-2014

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 economic 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.

Comments

The published version of this Working Paper may be found in the 2016 publication: Reimagining Pensions.

Keywords

Social Security, Pensions, Means testing

Working Paper Number

WP2014-17

Copyright/Permission Statement

The authors acknowledge financial support from the Australian Research Council Centre of Excellence in Population Ageing Research (CE110001029) and the Pension Research Council. Mike Orszag and other conference participantsprovided valuable comments. All opinions, errors, findings, interpretations, and conclusions of this paper representthe views of the authors and not those of the Wharton School or the Pension Research Council. © 2014 Pension Research Council of the Wharton Schoolof the University of Pennsylvania. All rights reserved.

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Date Posted: 26 June 2019