Here’s what you need to know about Australia’s Retirement System: It’s really big. It’s government mandated. It’s privately run. It’s really sophisticated.
Still curious? Host Josh Cohen’s two guests have played meaningful roles in the system’s development from the highest levels of government and industry. The Honorable Nick Sherry started one of the first modern Superannuation Funds in Australia and then went to be the leading minister in the government overseeing the industry. Ian Silk ran the largest Super Fund called Australian Super. There’s a lot we can learn from their experiences.
[:19] Josh Cohen, your host, introduces today’s topic: Australia and their compulsory retirement system with very sophisticated investments that cause admiration worldwide.
[2:30] Josh is accompanied by two experts to dive deep into the origin and evolution of the Australian retirement system.
[2:55] Nick Sherry joins the conversation. He is a former Australian politician who served as a member of the Australian Senate for the state of Tasmania from 1990 until 2012, Sherry was sworn in as the Assistant Treasurer in 2009, after serving as the first Australian Minister for Superannuation and Corporate Law.
[4:39] Nick shares how he accidentally got involved in the retirement space.
[5:45] Nick explains how Australia began to shape a new retirement policy.
[6:40] Josh describes how the industrial awards system work along with the social wage.
[7:56] Nick shares the development of the House Plus Fund.
[9:10] Nick explains the administrative hassles they had to overcome in the late 80s’.
[10:09] Nick becomes in charge of an additional pension reform when he just assumed the role as a Senate for the state of Tasmania.
[12:32] Nick talks about initiating the Cooper review.
[13:25] What happens at retirement?
[14:01] Nick speaks about his life now that he is retired but still very active!
[14:38] Josh explains what fund mergers are about.
[15: 23] Ian Silk, Chief Executive at AustralianSuper, joins the conversation by providing answers about how Fund mergers work in Australia.
[16:47] Ian talks about his vast experience in the field of funds.
[17:18] Ian dives deep into the five sectors the retirement providers fall into.
[18:30] Ian describes two reasons why the owners have decided not to run their own plans.
[20:05] Compulsion arrived to change how things were doing in regards to retirement.
[20:34] An important feature of the Australian retirement system: An employer can run his/her own plan or pick a super plan as the default for his/her workers. There is always a default investment option if the employer doesn’t make an election.
[21:28] Josh talks about Industry funds that arise in the late 1980s and Ian expands on the topic.
[23:39] Josh introduces the fourth sector: The retail sector.
[25:32] Ian explains how people took their funds from retail to industry.
[25:43] The fifth sector is called the Self Managed Super, where people decide to run their own Super. Ian describes the one big driver of its popularity.
[26:58] Ian explains how Australian Super originated and how it scaled.
[28:49] The area of investing innovation is the one that is admired by many in Australian
Super. Ian describes this particular feature of the Australian Super.
[30:02] Ian shares what improvements could be done to an already sophisticated Australian retirement system.
[31:03] Ian talks about the secret to the success of the Australian retirement system.
[32:11] Ian shares the proudest moment of his career, realizing that low to middle-income workers in Australia have something significant to look forward to in retirement that wasn’t the case 30 to 40 years ago.
[33:23] Josh shares his key takeaways from the amazing conversations with Nick Sherry and Ian Silk.