Nicholas SherrySenior Advisor on Pensions & Superannuation,

ERNST & YOUNG(AUSTRALIA)

Friday, 27.9.2013

“The Australian Pension Reform Experience”15th Hydra MeetingHellenic Association of Insurance Companies

Page 3

Pillar 1 Pillar 2 Pillar 3

► Flat universal, state pension, funded Pay as You Go ► Defined benefit pension/lump sum

► 24 p.c. of average earnings, increased from time to time.

► Coverage 3 out of 10, public service and large corporates

► Pension age women 60, men 65► English “common law trustee”

governance and investment by private sector

Australia Pension System early 1980s

Page 4

Pillar 1 Pillar 2 Pillar 3

► Flat state pension – funded Pay and You Go

► Compulsory defined contribution: 3 p.c. (1987) 3 – 9 p.c.(1992-2002)

9-12 p.c. (2012-2020)

► Average 3 to 3.5 p.c. additional voluntary employee contribution

► Means tested – assets and income (1984)

► Lump sum, early access very limited

► 27.7 p.c. male total average weekly earnings (2004 &2010)

► Coverage 92 p.c. of workforce► Most define benefits closed (1990-2005)► Independent, trustee governance,

diversified prudent best interest of member investment by private sector. Prudentially regulated (1994)

► Pension age 65, women 60 to 65 (1996-2012)

► Pension age 65 to 67 (2013-2023)

► Low cost diversified investment “default”, auto-consolidation multiple accounts, increased trustee governance and transparency, fee for service replaces commissions (2013)

Australia – Pension System today

Thank you!