Thread by @JosephineCumbo

Good to catch up with Aussie pension supremo ⁦⁦@Cooperannuation⁩ at @FT towers today. Tweets to follow on developments Down Under which will be of interest to #pensions policy and market observers in the UK.

@Cooperannuation @FT Deferred annuities have been launched Down Under.

These annuities are bought at age 65 but don't start to pay an income until the policyholder reaches 85.

There has been much talk about the role Deferred Annuities could play in the UK.

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@Cooperannuation @FT In a real example, an Aussie who bought a $10,000 deferred annuity at 65 would receive an annual income of $1741 a year from age 85, if they survived to that age.

So the retiree has a 20-year window to spend down their capital knowing they will have a secure income from 85.

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@Cooperannuation @FT The Aussies have also just launched a review into the adequacy of superannuation contribution rates.

Currently, Aussie employers make superannuation contributions of 9.5% of salary on behalf of employees with this set to rise to 12% by 2025.

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@Cooperannuation @FT It is suspected that the review will question whether superannuation rates need to climb to 12% by 2025.

In the UK, there is pressure on Govt to set a path for minimum mandated contributions to rise beyond 8% for workers auto-enrolled into company pension schemes.

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@Cooperannuation @FT A potential outcome of the review Down Under is that the Aussies conclude there is little justification for superannuation rates to increase beyond 10%.

The review will be closely watched by those in the UK who are pushing to get pension contributions rates above 8%.

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