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Nicholas Sherry
Senior Advisor on Pensions & Superannuation,
ERNST & YOUNG
(AUSTRALIA)
Friday, 27.9.2013
“The Australian Pension
Reform Experience”
15th Hydra Meeting
Hellenic Association of Insurance Companies
Page 3
Pillar 1 Pillar 2 Pillar 3
► Flat universal, state pension, funded
Pay as You Go ► Defined benefit pension/lump sum
► 24 p.c. of average earnings, increased
from time to time.
► Coverage 3 out of 10, public service and
large corporates
► Pension age women 60, men 65
► English “common law trustee”
governance and investment by private
sector
Australia Pension System early 1980s
Page 4
Pillar 1 Pillar 2 Pillar 3
► Flat state pension – funded Pay and
You Go
► Compulsory defined contribution:
3 p.c. (1987)
3 – 9 p.c.(1992-2002)
9-12 p.c. (2012-2020)
► Average 3 to 3.5
p.c. additional
voluntary
employee
contribution
► Means tested – assets and income
(1984)
► Lump sum, early access very limited
► 27.7 p.c. male total average weekly
earnings (2004 &2010)
► Coverage 92 p.c. of workforce
► Most define benefits closed (1990-2005)
► Independent, trustee governance,
diversified prudent best interest of
member investment by private sector.
Prudentially regulated (1994)
► Pension age 65, women 60 to 65 (1996-
2012)
► Pension age 65 to 67 (2013-2023)
► Low cost diversified investment “default”,
auto-consolidation multiple accounts,
increased trustee governance and
transparency, fee for service replaces
commissions (2013)
Australia – Pension System today
Thank you!

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16 nicholas sherry

  • 1. Nicholas Sherry Senior Advisor on Pensions & Superannuation, ERNST & YOUNG (AUSTRALIA) Friday, 27.9.2013
  • 2. “The Australian Pension Reform Experience” 15th Hydra Meeting Hellenic Association of Insurance Companies
  • 3. Page 3 Pillar 1 Pillar 2 Pillar 3 ► Flat universal, state pension, funded Pay as You Go ► Defined benefit pension/lump sum ► 24 p.c. of average earnings, increased from time to time. ► Coverage 3 out of 10, public service and large corporates ► Pension age women 60, men 65 ► English “common law trustee” governance and investment by private sector Australia Pension System early 1980s
  • 4. Page 4 Pillar 1 Pillar 2 Pillar 3 ► Flat state pension – funded Pay and You Go ► Compulsory defined contribution: 3 p.c. (1987) 3 – 9 p.c.(1992-2002) 9-12 p.c. (2012-2020) ► Average 3 to 3.5 p.c. additional voluntary employee contribution ► Means tested – assets and income (1984) ► Lump sum, early access very limited ► 27.7 p.c. male total average weekly earnings (2004 &2010) ► Coverage 92 p.c. of workforce ► Most define benefits closed (1990-2005) ► Independent, trustee governance, diversified prudent best interest of member investment by private sector. Prudentially regulated (1994) ► Pension age 65, women 60 to 65 (1996- 2012) ► Pension age 65 to 67 (2013-2023) ► Low cost diversified investment “default”, auto-consolidation multiple accounts, increased trustee governance and transparency, fee for service replaces commissions (2013) Australia – Pension System today