Many countries, including Australia, recognise the need to have a well developed retirement savings policy to ensure that retirees have sufficient savings to live comfortably in retirement. Australia’s retirement saving system consists of threei different components:
The Age Pension funded from current Government revenue;
Compulsory saving, by means of occupational superannuation; and
Voluntary saving and investment, partly supported by tax concessions.
The Australian retirement savings system is currently coming under pressure as a result of a number of factors. Australia’s population is getting older and this is expected to significantly increase the costs to government of providing age pensions, aged care and health care in the future. Occupational superannuation due to its compulsory nature has increased the level of employee savings. However, there are many who still have little or no savings in superannuation, particularly part-time and low income employees. The projected contribution level of nine percent (9%) by the 2002/03 year is unlikely to provide sufficient savings to enable retirees to enjoy a standard of living in retirement commensurate with their expectations.
This paper compares the Singapore, United Kingdom, Irish and Australian retirement savings systems with particular emphasis on the impact of tax on saving for retirement through the use of superannuation/pension funds. The objective of the paper is to determine whether the Australian retirement savings system contains sufficient tax incentives to encourage Australians to save for retirement
