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Workplace Pension Reform: Lessons from Pension Reform in Australia and New Zealand

Published online by Cambridge University Press:  25 September 2012

Sharon Collard
Sharon Collard*
Affiliation:
Personal Finance Research Centre, University of Bristol E-mail: S.Collard@bristol.ac.uk
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Abstract

The UK Government's workplace pension reforms introduce major changes to the way in which employees save for retirement. Eligible employees will be automatically enrolled into a workplace-based pension scheme and, for the first time in the UK, employers will be legally required to contribute to employees’ pensions. This article critically examines the evidence from New Zealand and Australia, two countries that have undergone pension reforms similar in some ways to the UK reforms. We assess what we can learn from their experiences in two areas: firstly, how pension schemes are structured and, secondly, the outcomes for individuals. The evidence highlights the potential of automatic enrolment to overcome people's disinterest in pension saving. At the same time, relatively few UK employees are likely to choose where their pension savings are invested. As a result, default funds will play an important role in determining the pension outcomes for individuals.

Keywords

Workplacepension reformcomparativeoutcomes
Type
Themed Section on Rethinking Retirement Incomes: Inequality and Policy Change in the UK and Anglo Saxon Countries
Information
Social Policy and Society , Volume 12 , Issue 1 , January 2013 , pp. 123 - 134
Copyright
Copyright © Cambridge University Press 2012

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