Compulsion and choice: Lessons from the Aussie pension system

Roger Brosch explores what the ‘super’ Down Under means for pensions up here.

Compulsion isn’t a word many of us readily associate with the thousands of Britons spending time living and working in Australia, writes Roger Brosch.

I certainly didn’t have to compel my 24-year-old son, Joe, to try his luck Down Under, where he’s now working (and playing rugby!) in Sydney after finishing his degree. Wild horses wouldn’t have stopped him, to be honest! 

But in the financial services world, especially pensions, compulsion – the action or state of being forced to do something – does come to mind when we’re on the subject of everything from Ayers Rock to eskies (I’ll come back to this affectionate truncation later). 

That’s because the Australian pension model is much admired for its far-sighted boldness in forcing, yes, forcing workers to both join and gradually increase their contributions into workplace schemes as they progress in both experience and income through their working life. 

The result? A defined contribution pension system that, while not perfect, is far closer than ours to delivering the prospect of a realistic income in retirement. 

You can also read the full press release on ProfessionalAdviser.