US - The government committee charged with examining the challenges in providing retirement security for an ageing population is looking at the Australian experience of compulsory retirement saving in its efforts to find a solution for the US.
The House ways and means committee - sub committee on social security, heard testimony this week from Australian expatriate David O. Harris, managing director of London-based TOR Financial Consulting, on how the Australian model had been implemented.
Issues Harris testified on included partnership with the trade unions, incentives for low income workers and the self employed, information and education, cost effective regulation and contained administrative costs under the creation of numerous individual retirement accounts.
Harris told Global Pensions he was “grilled” for three hours and that there was particular interest in what had happened in the UK with pension mis-selling.
“The consensus was not clear but there was considerable interest in the Australian model and in particular the work that was done with the unions and also the programme of educating the public about pensions,” he said.
In his testimony to the committee, Harris told the committee: “Compulsion in Australia has dramatically raised retirement savings and improved the future prospects of baby boomer and generation X retirees.
“Comparatively low administration costs, wide investment choice and minimal mis-selling have protected consumers from detriment.”
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