The most recent OECD report in its Pensions at a Glance 2009 study painted a dismal picture for older Australians with more than one senior Australian in four living in poverty citing the age pension as one of the major reasons.
The analysis also revealed Australian super funds, suffered loses of almost 27 per cent last year and were second only to Ireland as the worst performer.
“Investment loses were particularly large because of the large share of equities in pension fund portfolios,” the report says.
Most other OECD countries had an average of 36 per cent of their pension funds invested in shares prior to the crisis compared to 57 per cent by Australian super funds.
Super is heavily relied on for retirement income in Australia compared to other countries and along with private pensions and other investments account for 45 per cent of retirement incomes in Australia. This is more than double the OECD average of 20 per cent as stated by the report.
Even though super has suffered such large losses, “the high risk of old-age poverty in Australia is mainly due to the small amount of the age pension,” lead author of the report Edward Whitehouse says.