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Australia to conduct sweeping review of its retirement income system

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Australian Treasurer Josh Frydenberg on Friday ordered a wide-ranging review of the country's retirement income system, saying it was necessary to check on how it might perform as Australians live longer and the population ages.

[SYDNEY] Australian Treasurer Josh Frydenberg on Friday ordered a wide-ranging review of the country's retirement income system, saying it was necessary to check on how it might perform as Australians live longer and the population ages.

It would cover the A$2.9 trillion (S$2.7 trillion) compulsory pension system - the world's third-largest - which is called superannuation, the means-tested age pension on which the government spends over A$50 billion per year, as well as private savings, including home ownership.

The year-long independent review will also examine the impact of generous tax rebates that low income pensioners can receive on future government budgets.

The review comes amid opposition by some conservative lawmakers and businesses to plans to lift the minimum amount of an employee's salary an employer must set aside for the employee's retirement.

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The plans, first proposed by the Labor government in 2012 and which are yet to become law, will require employers to set aside a minimum of 12 per cent by 2025 from 9.5 per cent currently.

A three-person committee is due to submit the review to the government by June 2020, Frydenberg said in an e-mailed statement. 

REUTERS