1. Actuarial Research Symposium Adequacy of the SGL: An analysis of Longevity and Economic Impacts

2. SGL Adequacy Factors * SGL accumulation represents for most employees their entire retirement savings The adequacy of the retirement benefit will be affected by: Workforce participation Investment returns Period of living after retirement Cost of living in retirement Continuation of the Age Pension

3. Longevity

4. Cost of Living in Retirement 65-69: $54,000 pa 70-74: $49,000 pa 75+ : $48,000 pa

5. Required Assets at Retirement Declining Expenditure

6. Financial Survival 30 Years SG Accumulation Couple, declining income: safe Couple, non declining income: 27 years Single, declining income: 27 years Single, non declining income: 18 years

7. Conclusions The current SG 9% pa contribution over 30 years, plus the use of additional reverse mortgage funding is adequate to fund retirement for the typical couple If a couple earning AWE before retirement wished to live a comparable lifestyle after retirement, then the accumulated SG assets, even with the Age Pension support will be inadequate, Single retirees will in all probability face a significant reduction in their income during retirement.

8. Implications SGL will work if given time for the typical couple The transition to fully implemented SGL could be difficult The Age Pension needs to remain inplace