Despite living in Australia, my friends had no expectation of an Australian pension

I was out with my old University buddies last night, two had emigrated to Sidney Australia and were asking me what to do about retirement. They both had DB pensions in the UK and were members of Super schemes in Australia which they likened to the Allied Dunbar personal pensions I’d sold them in the 1980s. I explained to them that Australian pensions were the envy of the world and much admired in the UK as a source of value for money wealth accumulation. One of them explained that while they’d done “rather well”, they didn’t know what to do with their Australian Super of their UK personal pension. I do keep track of what happens to Allied Dunbar personal pensions – Zurich send their non-advised customers to another insurer to be offered investment pathways.

In Australia , the Retirement Income Covenant is supposed to offer dignity in retirement but talking to my friends the only pension they knew about was the “age pension” in Australia, Superannuation was as much a mystery to them as their Allied Dunbar pots they’d saved into in their youth.

They were vaguely aware that there was an Australian State Pension and a UK State Pension but – being in their early 60s and thinking of retirement, all that they had confidence in was a DB plan they had been in the UK , before they emigrated.

So two well educated 60 year olds had clearly not bought the Kool-Aid.

Having read this document , before our evening out, neither had I

The document devotes 20 pages to saving for retirement and 6 paragraphs to what happens after. As many Australians can look forward to 30 year lives once they start drawing their pensions , the imbalance between saving and spending is odd. As is the language of the report which switches from talking about collective schemes to individual products.

Appropriately designed quality filters can improve trust and confidence in the system and enable individuals to assess performance, value for money and reliability of retirement income products. This allows members to make more informed decisions relevant to their retirement objectives and circumstances, ultimately enhancing confidence in their decision making. They also enhance consumer protections and provide assurance that products meet minimum standards by weeding out substandard products from the market and enhance competitive tensions and system efficiency

This product focussed approach suggests the same lack of an integrated approach to retirement as we see in the UK. It is hard to be impressed by the recommendation from the Super Member’s Council

Whether you are in Australia or in the UK, the concept of “value for money” in retirement is an after thought. Yet the bulk of our retirement savings is already owned by the over 50s and I would be surprised if that is not the case in Australia too.

The 21 page submission to Australia’s Superannuation Evaluation and Performance Unit is well and good , but it does nothing to consider value for those in retirement. As in the UK, so in Australia, the only things my educated friends understand are their pensions, Super and personal pension pots remain a mystery to them.