The wonderful visit to OZ – Jo Cumbo reports from a land down under.

Jo Cumbo is an Australian living in England who makes no bones about where her heart is!

For a fortnight, Jo has been sending us “twitter from Australia” – like Alastair Cook t us letters from America. And I have been loving the actuality of Jo’s reporting.

The Super War is dividing opinion in Australia. On the one side are those who see the huge Australian Super funds being used as a piggy bank by an Australian Government which would rather fund public projects with money from pensions than from general taxation.

Critics argue that investing in unquoted securities risks false valuations that could leave investors out of pocket if calls came on a fund (think Woodford)

On the other are those who see the investment of Super in the future of Australia as the future both for Australia and Super.

So far so familiar

The UK pension industry is having a mini-war of its own over this with some trustees arguing they are being asked to compromise their fiduciary duty. But in Australia, this argument is being played out on the front pages of national papers – everyone knows about Super-Wars.

It’s tempting to see Super-wars coming to the UK in time but must remember that in Australia, the state pension is effectively Super, few Australians want to be in a position where they have to claim a means tested state benefit. In the UK , it is the workplace pension that tops up the State Pension and for most people the State Pension is at the heart of their retirement expectation.

Which is why there is not the pressure from unions, employers and most of all from Government to negotiate the rates of contribution going into Super today. Indeed , the Government’s reluctance not to implement the AE reforms, promised for some time about now, suggests that it is more interested in maintaining the Triple Lock than replicating Super. Which is why I don’t think we’ll have the national awareness of how pensions are invested that is apparent in Australia – at least anytime soon.


A duty to the consumer to re-unite them with their pots.

A good section of Jo’s reporting has been on the interventions of the Australian Government to sort out their lost pot problem

Again the problem is familiar though the numbers are considerably smaller than in the UK

And the reason why Australia has less in loss pots is pretty clear. The Government gets on with reuniting people with their money and actively assists people to have one rather than a number of pots.

Here I think the parallels with the UK are exact. So far, the UK has told pension providers to sort their mess out and has been restrained from mandating consolidation by arguments about “member detriment”. The Australian system of proactive consolidation has no such scruples. People either do the work as they want it done or it is done for them.


Aboriginal rights to an early pension

One of Jo’s most interesting tweets concerns a class action from a group of Australians who have lower life expectancy than any other – the Aboriginals.

Jo is right to take this seriously. There are calls in the UK for the state pension age to be flexible to enable those who have impaired life expectancy to receive their pension early. As we move towards greater sel-determination, how long will it be before Ros Almann’s calls for the state pension to be underwritten are heard? Certain readers of this blog, including one of the Baroness’ fellow peers, will reading this with a mixture of interest and alarm.

Paying pension some attention

Enthusiasts for our Government’s campaign to improve the profile of UK pensions through Big Zu, will look on enviously at the resources available to Super’s to promote and educate staff.

Will UK workplace pensions press to provide financial advice to their members?

The Fundamental things apply…

So long as we have an ageing population and an increased dependency on the young to pay pensions to those in later years, the funding strains on pensions will trouble Governments from Brisbane to Westminster.

Australia – for many good reasons – is a great comparator to the UK.  Of all the initiates that the Australian pension system is embracing, I find this the most exciting and the one I would most like to see replicated in the UK

Welcome back Jo – Britain needs you – even if your heart is where your home is!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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