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Assessing the equity of Australia's retirement income system

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George Rothman
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Paper delivered to 17th Colloquium of Superannuation Researchers, University of NSW, 6-7 July 2009.

Most analyses of Australia's retirement income system address only the accumulation phase; they draw the clear conclusion that the system strongly favours higher income earners as these make most of the concessional contributions and receive a higher tax saving per dollar contributed.

This paper places emphasis on a 'whole of life' or lifecycle perspective where age pension benefits in the retirement phase are included.  The cost to government of its retirement income policies as a whole is modelled for representative cohorts using Treasury's relatively comprehensive RIMGROUP model. This provides a framework for assessing the vertical equity of Australia's retirement income system (by lifetime income deciles) and also horizontal equity, in respect of gender.