Rafal Chomik and John Piggott
This paper offers a discussion of adequacy of retirement benefits. We have the Australian context in mind, but introduce extensive international comparisons to provide perspective. We cover possible benchmarks against which to set benefits, how these might change depending on household structure, the actual levels at which different countries set basic and minimum pension levels, related taxation policy, and the policies and rationale for benefit indexation.
We focus primarily on adequacy in the context of poverty alleviation, but also investigate the idea of defining the adequacy of income replacement. This includes a discussion of design features that increase the likelihood that the retirement system will provide adequate income replacement and the measures that can guide our assessment of the outcomes.
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