I’m interested in the Australian system of rating retirement funds and have looked at the owners of Epic Retirement’s Chant West – the organisation delivering Tick, it’s system to assess what we’d call “pensions”. The ownership is with FE fundinfo.

Really? Actually, where Australians are being taken is to a place which is accessing asset management through wealth managers.

FE fundinfo owns Chant West who have an attitude that is much closer to wealth management than pension management.

I am amazed by what the 18 key criteria for a tick are. They are opinion not fact based and are very much organised for those who think of their pensions as wealth rather than income.

There is one that talks to pensions but in a way that will mean to ordinary savers looking for …well a pension.

The concept of an income for life is mentioned but it is mentioned as a means of maximising wealth and lifelong protection is only one of the 18 criteria, it is not essential to getting a tax in retirement.

This is the territory of SJP and wealth managers and defines mainstream Australians as quite different to British savers, we are focussed very much on the rate our pots can become “pensions”, the security (in real terms) of the income and the issues of flexibility as to how money is drawn are secondary to the pension – the payment of an income for life.

Here are the criteria

You can download from this link.

Wealth management not pensions

If Australia is heading towards wealth management , I am impressed about the progress it has made from recent the most recent OECD report on Australian wealth in retirement (which did not make impressive reading)

My suspicion that Super is a wealth management system similar to 401K in the States and, 30 years after Super began, it is still to properly to get to grips with pensions.

There is no memory of collective pensions in the conversations I have with excited Australians, there is no recollection (interesting word) of mutual and social insurance and for that reason Australia is both admired (by those who prefer personal pensions) and concerning to those amongst us who see CDC, DB and at the least defaults in workplace plans.

The lines are drawn, which way will Britain move? Will Britain move towards the wealth management of Australia or towards the history of S2P and Serps and in a private sense the defined benefit pension and its non-guaranteed child – CDC?

As one reader has commentated (see below)

I may be wrong but I believe I heard that many Australians had more money in their “super” at 85 than they had at 65.  Is that a pension system?

The 18 key criteria suggested by Bec are worth judging the management of pots and may concede an opt-out to a “tailored pension portfolio”  and a “lifetime income product“.

Understanding the differences between the two approaches to the management of later life financing is going to take some doing. My suspicion is that we will need to work out the importance of the default, sooner rather than later.