Australia’s retirement system has a much higher asset growthrate than other industrial nations. It also spends less on old-agepensions and has high individual savings rates.
According to a report by Julie Agnew for the Center forRetirement Research at Boston College, the U.S. could learn a fewlessons from Australia’s system, which combines mandated individualsavings and a means-tested government pension.
In her research, Agnew found that plan participants often accepttheir plan’s default investment option, and while both the U.S. andAustralia have introduced guidelines for default investmentallocations, Australia’s greater emphasis on defaults should ensurethat their guidelines have a more far-reaching impact.
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