Australia Doesn't Have the Answers

Australians make up barely 0.3 percent of the globe's population and yet hold A$2.1 trillion ($1.63 trillion) in pension savings -- the world's fourth-largest such pool. Those assets are viewed as a measure of the country's wealth and economic resilience, and seem to guarantee a high standard of living for Australians well into the future. Other developed nations, aging even faster than Australia and subject to fraying safety nets, have held up the system as a world-class model to fund retirement. In fact, its future looks nowhere near so bright.

Australia's so-called superannuation scheme is a defined contribution pension plan funded by mandatory employer contributions (currently 9.5 percent, scheduled to rise gradually to 12 percent by 2025). Employees can supplement those savings and are encouraged to do so with tax breaks, pension fund earnings and generous benefits.