OECD points to Australian seniors' poverty

The degree to which Australian superannuation funds have been hit by the global financial crisis has been laid bare by the Organisation for Economic Cooperation and Development (OECD).

The OECD has revealed that with real losses of 26.7 per cent, Australian funds turned in one of the worst investment performances of the 30 OECD countries, running second only to Ireland.

What is more, the OECD report suggests that more than one in four Australian seniors live in poverty and that this represents the fourth highest old age poverty rate among OECD countries.

Drilling down on the manner in which recent economic events had impacted Australian pensions and superannuation, the OECD report said Australia had been hit particularly badly because private pensions and other investments provided 45 per cent of retirement incomes in Australia and investment losses had been large because of high exposures to equities.

Looking at old age poverty in Australia, the report said nearly 27 per cent of over 65s in Australia had incomes below the OECD poverty threshold and that the high risk of old-age poverty was mainly due to the low level of the age pension.

It said, by comparison, equivalent schemes in OECD countries were worth 25 per cent more compared with national average earnings than the age pension in Australia, with New Zealand’s basic pension being worth 80 per cent more relative to average earnings.