Every year the Melbourne Mercer Center rates a number of countries on their retirement income systems. This covers the entire system, so for the US it includes Social Security, 401(k)s, pensions, IRAs, and so on; that is, it isn’t focused just on Social Security.
They also show how each country does in the 3 sub-indexes. Here’s Australia:
3rd best in the world isn’t bad. What could Australia do to move from B+ to A?
Australia gets an A in Adequacy and Integrity but only a B in Sustainability. Sustainability covers things like the level of funding of pension systems, the length of retirement, labour force participation of the older population, and the current level of government debt.
The biggest thing Australia holding down Australia’s Sustainability score is the overall level of pension funding (across both public and private pensions). It isn’t bad exactly. It has a score of 6.2 which is higher than 16 of the 26 countries. But it is kind of…meh. Denmark, by comparison, has a score of 9.7. Even the US outscores it on this metric with a score of 6.7.
Some of that is probably due to the (relative) recency of superannuation; it only became widespread in 1992 under the Keating Labor Government. Sure, that was 24 years ago but the initial contribution was only 3%. It took over a decade for the full system to take effect, when rates hit 9% in 2002.
That’s not to excuse Australia. There’s clearly more than can and should be done.