Hostname: page-component-78c5997874-t5tsf Total loading time: 0 Render date: 2024-11-13T14:17:33.737Z Has data issue: false hasContentIssue false
  • English
  • Français

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
Get access Rights & Permissions [Opens in a new window]

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

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Australian Bureau of Statistics (2009) ‘Trends in superannuation coverage’, Australian Social Trends, 4102.0, www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features70March%202009 [accessed 23.06.12].Google Scholar
Australian Government (2010) Stronger Super, http://strongersuper.treasury.gov.au/content/publications/government_response/downloads/Stronger_Super.pdf [accessed 23.06.12].Google Scholar
Bateman, H. and Kingston, G. (2006) Comparative Performance of Retirement Income Systems in the Anglosphere: An Update, Reserve Bank of Australia seminar, June 2006.Google Scholar
Bingham, C. (2003) ‘Impact of private saving and longer careers on retirement incomes’, paper presented at the 11th Annual Colloquium of Superannuation Researchers, 7–8 July, University of New South Wales, Sydney.Google Scholar
Bunt, K., Adams, L., Koroglu, Z. and O'Donnell, E. (2006) Pensions and Pension Reform, DWP Research Report 357, Leeds: Corporate Document Services, http://research.dwp.gov.uk/asd/asd5/rrs-index.asp [accessed 23.06.12].Google Scholar
Clery, E., McKay, S., Philips, M. and Robinson, C. (2007) Attitudes to Pensions: The 2006 Survey, DWP Research Report 434, Leeds: Corporate Document Services, http://research.dwp.gov.uk/asd/asd5/rrs-index.asp [accessed 23.06.12].Google Scholar
Collard, S. and Moore, N. (2010) Review of International Pension Reform, DWP Research Report 663, Leeds: Corporate Document Services, http://research.dwp.gov.uk/asd/asd5/rrs-index.asp [accessed 23.06.12].Google Scholar
Department for Work and Pensions (DWP) (2010) ‘Workplace pension reforms regulations: impact assessment’, www.dwp.gov.uk/docs/wpr-ia.pdf [accessed 23.06.12].Google Scholar
Department for Work and Pensions (2012) ‘Workplace pension reform − automatic enrolment earnings thresholds: review and revision 2012/2013’, www.dwp.gov.uk/consultations/2011/auto-enrolment-revaluation.shtml [accessed 27.05.2012].Google Scholar
Fear, J. and Pace, G. (2008) ‘Choosing not to choose: making superannuation work by default’, Discussion Paper No. 103, The Australia Institute, www.tai.org.au/file.php?file=dp103.pdf [accessed 23.06.12].Google Scholar
Financial Markets Authority (2011) ‘Report of the Financial Markets Authority (in respect of the KiwiSaver Act 2006) for the year ended 30 June 2011’, www.fma.govt.nz/media/368324/kiwisaver_report_for_the_year_ended_30_june_2011.pdf [accessed 23.06.12].Google Scholar
Finney, A. and Davies, S. (2011) Towards a Nation of Savers: Understanding and Overcoming the Challenges to Saving on a Lower Income, Bristol: Personal Finance Institute, University of Bristol, www.bristol.ac.uk/geography/research/pfrc/themes/psa/nation-of-savers.html [accessed 23.06.12].Google Scholar
Gallery, G., Gallery, N. and Brown, K. (2004) ‘Superannuation choice: the pivotal role of the default option’, Journal of Australian Political Economy, 53, 44–66.Google Scholar
Gibson, J. and Le, T. (2008) ‘How much new saving will KiwiSaver produce?’, Working Paper in Economics 03/08, University of Waikato, Hamilton, http://researchcommons.waikato.ac.nz/bitstream/handle/10289/1595/Economics_wp_0803.pdf?sequence=1 [accessed 23.06.12].Google Scholar
Hacker, J. (2008) The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, Revised edn, Oxford: Oxford University Press.Google Scholar
Hayden, C., Boaz, A. and Taylor, F. (1999) Attitudes and Aspirations of Older People: A Qualitative Study, DSS Research Report 102, London: HMSO.Google Scholar
Hjertaker, I. and Tranøy, B. S. (2010) ‘Opportunistisk Keynesianisme – Om bankstere og økonomisk politikk’, Markedets fremtid: Kapitalismen i krise?, Trondheim: Cappelen Akademisk Forlag.Google Scholar
IFF Research Limited (2007) ‘Investment risk rating: consumer attitudes towards risk’, Financial Services Consumer Panel, London, www.fs-cp.org.uk/publications/pdf/risk_ratings_research.pdf [accessed 23.06.12].Google Scholar
Ingles, D. and Fear, J. (2009) ‘The case for a universal default superannuation fund’, Policy Brief Number 3, The Australia Institute, www.tai.org.au/index.php?q=node%2F19&pubid=677&act=display [accessed 23.06.12].Google Scholar
Inland Revenue (2008) KiwiSaver Evaluation Annual Report July 2007–June 2008, Wellington: Inland Revenue, www.ird.govt.nz/aboutir/reports/research/report-ks/ [accessed 23.06.12].Google Scholar
Inland Revenue (2010) KiwiSaver Evaluation Annual Report July 2009–June 2010, Wellington: Inland Revenue, www.ird.govt.nz/aboutir/reports/research/report-ks/ [accessed 23.06.12].Google Scholar
Inland Revenue (2011) KiwiSaver Evaluation Annual Report July 2010–June 2011, Wellington: Inland Revenue, www.ird.govt.nz/aboutir/reports/research/report-ks/ [accessed 23.06.12].Google Scholar
Lain, D., Vickerstaff, S. and Loretto, W. (forthcoming) ‘Reforming state pension provision in “Liberal” Anglo-Saxon countries: re-commodification, cost-containment or recalibration’, Social Policy and Society.Google Scholar
National Pensions Convention (2011) NEST Briefing, November 2011, London: NPC, http://npcuk.org/publications [accessed 23.06.12].Google Scholar
National Employment Savings Trust (NEST) (2011) Developing and Delivering NEST's Investment Approach, London: NEST.Google Scholar
NEST (2012) Member Research Brief: Research to Support the Investment Strategy, London: NEST.Google Scholar
OECD (2009) Pensions at a Glance 2009: Retirement-Income Systems in OECD Countries, Paris: OECD.Google Scholar
OECD (2011) Pensions at a Glance 2009: Retirement-Income Systems in OECD Countries, Paris: OECD.Google Scholar
Rashbrooke, G. (2009) ‘Simple, effective and (relatively) inexpensive: New Zealand retirement provision in the international context’, Social Policy Journal of New Zealand, 36, 97–110.Google Scholar
Savings Working Group (2011) Saving New Zealand: Reducing Vulnerabilities and Barriers to Growth and Prosperity, Wellington: Savings Working Group, www.treasury.govt.nz/publications/reviews-consultation/savingsworkinggroup/pdfs/swg-report-jan11.pdf [accessed 23.06.12].Google Scholar
Senate Select Committee on Superannuation (2002) Superannuation and Standards of Living in Retirement, Canberra, ACT: Parliament of Australia Senate, www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=superannuation_ctte/media/index.htm [accessed 23.06.12].Google Scholar
St John, S., Dale, M. C. and Littlewood, M. (2011) KiwiSaver: Four Years On, Retirement Policy and Research Centre Working Paper 2011–12, Auckland: The University of Auckland Business School, http://docs.business.auckland.ac.nz/Doc/WP-2011-2-Kiwisaver-Lessons-Final.pdf [accessed 23.06.12].Google Scholar
Swan, W. (2009) Budget Speech 2009–10, 12 May, Canberra, ACT: Australian Government, http://www.budget.gov.au/2009-10/content/speech/html/speech.htm.Google Scholar
Sy, W. (2008) Toward a National Default Option for Low Cost Superannuation, 16th Australian Colloquium of Superannuation Researchers, Sydney: University of New South Wales, http://myt.asb.unsw.edu.au/research/centreforpensionsandsuperannuation/Documents/W.%20Sy%20-%20Towards%20a%20national%20default%20option%20for%20low-cost%20superannuation%20.pdf [accessed 23.06.12].Google Scholar
Tapia, W. and Yermo, J. (2007) Implications of Behavioral Economics for Mandatory Individual Account Pension Systems, OECD Working Papers on Insurance and Private Pensions No. 11, Paris: OECD.Google Scholar
Work and Pensions Committee (2012) 2nd Special Report – Automatic Enrolment in Workplace Pensions and the National Employment Savings Trust: Government Response to the Committee's Eighth Report of Session 2010–12, London: The Stationery Office Limited.Google Scholar