1. Monday 23rd October, 2017 Invest Victoria
Heading
2017 Melbourne Launch
Monday 23rd October, 2017 Invest Victoria

2. Results
Dr David Knox

3. Rankings 2017
Denmark
The Netherlands
Australia

4. Retirement income systems
PENSION SYSTEMS ARE IMPORTANT BUT DIFFERENT
Assets
Pensions
Private
Lump sums DB DC
Public
Insurance
Governance
Employers
Retirement income systems
Indexation
Members
“Pension systems face considerable social and economic challenges in the wake of the economic crisis and given the ongoing population ageing.”
- OECD
Too important to be ignored

5. THE STARTING POINT

6. THE FUNDAMENTAL QUESTIONS
ADEQUACY
“What do you get?”
SUSTAINABILITY
“Can it keep delivering?”
INTEGRITY
“Can it be trusted?”

7. CHANGES FROM 2016 TO 2017 Three new countries Colombia New Zealand
Norway
New Sustainability question
Real economic growth
Reduced weighting for assets and contributions
Adequacy sub-index
Net replacement rate now allows for voluntary schemes

8. CALCULATING THE MMGPI

9. 1 2 3 ADEQUACY France 80.4 Netherlands 78.0 Ireland 77.9
Minimum (or base) pension
Net replacement rate
Benefit design
Non-super savings
Level of “growth” assets 3
Ireland 77.9
… India, Mexico, South Africa

10. 1 2 3 Denmark 79.8 Netherlands 73.5 Australia 73.0 SUSTAINABILITY
Coverage of private pension plans
Level of pension assets as % of GDP
Demographic issues
Mandatory contributions with funding
Labour force participation rate
Net government debt
Real economic growth 3
Australia 73.0
… Japan, Austria, Italy

11. 1 2 3 INTEGRITY Finland 91.0 Norway 90.3 Netherlands 87.5
Regulation of private pension plans
Governance requirements – national and pension plans
Protection of members’ benefits
Communication to members
Costs of the system 3
Netherlands 87.5
… China, Argentina, Mexico

12. OVERALL 2017 RESULTS

13. THE GLOBAL VIEW

14. AUSTRALIA’S RESULTS Overall index value: 77.9 to 77.1
Reduction in net household saving rate
Impact of new sustainability weightings
Recommendations
Introduce requirement for an income stream
Continue to raise labour force participation rates at older ages
Adjust age pension eligibility age with life expectancy
Increase preservation age gradually

15. GLOBAL CHALLENGES Increase relevant retirement/pension ages
Promote higher labour force participation rates at older ages
Encourage/require additional savings
Increase coverage of employees and/or the self-employed
Reduce leakage from the system before retirement
Review the indexation of the public pension
Improve the governance and transparency of private pensions