1 Rewarding older workers

2 Old-age poverty Percent in poverty (%)

3 Reduce old- age poverty Target gross replacement rate of 60-70% Fiscal sustainability 1 23 Criteria for success

4 5% increase in age pension for every year retirement is delayed Requirement 1.Continue working and contributing to superannuation beyond the age pension age 2.Do not access the age pension My recommendation

5 % of median salary53%55%63% Assumptions: Age 56, $40K salary, $55K super/assets Criteria 1: Reduce old-age poverty Delay to 70 with proposed scheme Poverty line (50-60% median salary) Income

6 % of median salary53%55%63% Assumptions: Age 56, $40K salary, $55K super/assets Criteria 1: Reduce old-age poverty Delay to 70 with proposed scheme Poverty line (50-60% median salary) Income

7 % of median salary53%55%63% Assumptions: Age 56, $40K salary, $55K super/assets Criteria 1: Reduce old-age poverty Delay to 70 with proposed scheme Poverty line (50-60% median salary) Income

8 Replacement rate57%60%65% Assumptions: Age 56, $80K salary, $155K super/assets Criteria 2: Target gross replacement rate Target gross replacement rate (60-70%) Income

9 Replacement rate57%60%65% Assumptions: Age 56, $80K salary, $155K super/assets Criteria 2: Target gross replacement rate Target gross replacement rate (60-70%) Income

10 Replacement rate57%60%65% Assumptions: Age 56, $80K salary, $155K super/assets Criteria 2: Target gross replacement rate Target gross replacement rate (60-70%) Income Delay to 70 with proposed scheme

11 Additional people who delay retirement Impact (bps) 2%0 3.5%3 5%7 10%18 Sensitivity analysis Impact (bps) Criteria 3: Fiscal sustainability

12 Evaluation Reduce old- age poverty Target gross replacement rate of 60-70% Fiscal sustainability 1 23