Australia, long regarded as a model for global pensions reform, has some explaining to do after the markets meltdown, and not just to its own citizens.
Having forced Australians over the past two decades to trust in markets to provide for their old age -- and tempted other nations to go down the same path -- it is watching horrified as a big chunk of its retirement savings go up in smoke.
Last year's plunge in financial markets has wiped out about a quarter of Australia's $1-trillion in pension-fund savings in real terms, according to OECD data, a figure surpassed only by the vastly bigger economies of the United States and Britain.
Australian pension funds lost about $200-billion in the first 10 months of 2008, compared with $300-billion for the UK and a staggering US loss of $2.2-trillion, the data showed. Over 10 years, Australian data still shows positive returns but even local industry figures point to the worst decade in 30 years.
As a result, Australians who never dreamt of queuing up for a state pension are now doing just that, feeding a crisis of confidence in a pension model that has served as a trail-blazer for other nations around the world, from Asia to Europe.
full story from M&G here