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You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning. You Manage It! 1: Global Australia's 'Super' Retirement Program Is a Source of National Pride Australia currently has one of the most highly regarded re- tirement systems in the world. It is based on compulsory em- ployee contributions that are put into a retirement fund. The retirement system is called Superannuation and it functions similarly to a 401(k) retirement plan in the United States. Cur- rently employers in Australia are required to send 9 percent of an employee's salary into the Superannuation program, which provides a menu of different investment funds that allows em- ployees to make choices regarding how to allocate their re- tirement funds into investments that differ according to risk. Employees' contributions and investment earnings are taxed at 15 percent. substantially below the ordinary income tax rate. Around 20 percent of employees put additional carnings into the retirement fund and some employers match the contribu- tions that employees put in the fund. More than 90 percent of employed Australians contribute to Superannuation, compared to 40 percent of American employees who participate in their employer's retirement plan. The Superannuation retirement program augments a national pension system in Australia that is funded by taxes and is simi- lar to the Social Security retirement program in the United States. At present, the Superannuation program has grown to an amount equal to the cquivalent of $1.5 trillion, which represents over half the amount that Americans have put into their 401(k) accounts, despite the fact that the United States has a population that is 14 times larger than that of Australia. Consequently, experts estimate that an Australian employee who contributes to the Superannuation program over a 30-year period can expect to have a retirement income equivalent to 70 percent of his or her prere- tirement income. This is the percentage of retirement income that financial experts recommend. The Superannuation program began in 1992 and initially it re- quired a compulsory contribution of 3 percent of an employee's salary, Over the years, Australians have voted for increases in the size of the mandatory contributions to Superannuation, so that the employee contribution now currently stands at 9 percent of sal- ary. However, in a recent election Australians approved a gradual year-by-year increase in the contribution anmount, which will end up at 12 percent by 2019 because people in future generations wil1 be likely to require a greater amount of retirement funds to cover longer life expectancies. By comparison, U.S. employees save an average of about 6 percent of their salaries into a 401(k) retirement fund, and consequently many Americans are concerned that they will not have enough retirement income saved when they decide to retire. Due to the success of the Superannuation program, when Australians think about their retirement they have a good reason to smile. 394 PART V • COMPENSATION Critical Thinking Questions 12-9. What can retirement benefits specialists in the United States learn from the successful experience of the Austra- lian Superannuation retirement program? Do you think that American citizens would support a law that requires that 9 percent of employee salaries must be contributed into a 401(k) retirement fund? Explain your reasoning.
Expert Answer:
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Superannuation is money aside by the employer for hisher employees over the working life and will be ... View the full answer
Related Book For
Economics
ISBN: 978-0073375694
18th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
Posted Date:
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In employment interviews, do you think that behavioral questions (such as Tell me about a business problem you have had and how you solved it) are more effective than traditional questions (such as...
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How is a statement of cash flows different from an income statement?
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You are the CEO of the Mesozoic Petrochemical Company and have just finished studying next year's plans of your foreign subsidiaries. You are pleased that the African regional unit's plan is so...
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With an average service rate of twelve customers per hour and an average customer arrival rate of ten customers per hour, calculate the probability that actual service time will be less than or equal...
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Mary Kay Morrow began working for Hallmark in 1982. At the beginning of 2002, Hallmark adopted the Hallmark Dispute Resolution Program, which required, among other things, that claims against the...
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Recording Bad Debts Sandel Company reports the following financial information before adjustments. Prepare the journal entry to record bad debt expense assuming Sandel Company estimates bad debts at...
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1. A sequence is defined by t = 1 and t = 2 and tn = integer. Determine the value of t2023 in terms of k. ktn1 +1 for n 3, where k is a positive k2tn-2
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How is Integration from Calculus and Calculus II used and applied in the field of Computer Sciences.
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Golf-course designers have become concerned that old courses are becoming obsolete since new technology has given golfers the ability to hit the ball so far Designers, therefore, have proposed that...
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Explain product life-cycle reverse logistics support policy of a company for reclaiming value from recalled or returned or recycled or waste materials. The choice of which type of reverse logistics...
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Explain how lead time analysis can be applied to manage the distribution operations of a clothes manufacturing company that source it's raw materials internationally and distributes the finish...
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i. Briefly explain what a stakeholder is? ii. Give 2 examples of stakeholders with regards to a health care system. iii. Explain why each example from part ( ii ) are stakeholders?
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Which leadership trait theories best explain characteristics that account for leadership effectiveness in your current or previous role (or organization)? Explain your answer.
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Explain how a staff study helps the staff identify the problem while following a logical sequence to produce a justifiable solution for the commande? Support your analysis with examples or scenarios.
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calculate the following for all 3 years. 1-Net operating working Capital 2-Working Capital 3-Net Working Capital 6703 8 9 Consolidated Scale Cash & equivalents Accounts & notes receivable 14...
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For the data in Exercise 17-19, use the FIFO method to summarize total costs to account for, and assign these costs to units completed and transferred out, and to units in ending work in process....
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How do economists distinguish between the absolute and relative sizes of the public debt? Why is the distinction important? Distinguish between refinancing the debt and retiring the debt. How does an...
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In November 1998 Vincent van Goghs self-portrait sold at auction for $71.5 million. Portray this sale in a demand and supply diagram and comment on the elasticity of supply. Comedian George Carlin...
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Consider the Security Market Line (SML). What determines its vertical intercept? What determines its slope? And what will happen to an assets price if it initially plots onto a point above the SML?
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(a) Determine the coherence area for a mercury arc lamp at 6330 at a distance of \(1 \mathrm{~m}\) from the source. Assume that the output aperture is \(3 \mathrm{~mm}\) and that the beam is...
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Assume an InGaAsP-InP laser diode that has a resonator cavity equal to \(250 \mu \mathrm{m}\). The peak radiation is at \(\lambda=1.55 \mu \mathrm{m}\). The refractive index of InGaAsP is 4. The...
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Let \(\boldsymbol{x}\) be a random variable with a standard normal distribution \(\varphi(t)\). Find (a) (b) P{0 x 1.42}. P{-0.73x0}. (c) P{-1.37 x2.01}. (d) (e) (f) (g) P{0.65 x 1.26}....
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