The best thing about it is that it is an account that the saver has actual visibility on. It encourages retirement savings. It's a good base for employer and/or

The best thing about it is that it is an account that the saver has actual visibility on. It encourages retirement savings. It's a good base for employer and/or government contribution match schemes. It has obvious and fair inheritance implications (if you die at 64, who gets your pension?). It's far safer, with much less risk that the money will be gone when you retire. The systemic risk aspect is much better too. The alternative is pension schemes, alarmingly similar to pyramid schemes. The company (or however it is centralized) pays out of current income, IE current employees or tax payers pay for old pension obligations. This works until it doesn't. If people start living longer, the company/tax base shrinks or no one bothered to do the sums 30 years ago, it collapses. The reason pension schemes are so common is because it's easier to start a pension scheme and very hard to move from the pension scheme to a superannuation scheme. When you start a pension shceme, the costs are very low at first while the number of retirees is low. You can pay out pensioners starting now. Superannuation only hits full speed once people have contributed to it for a lifetime start to retire. Way way longer then the horizon of CEOs, politicians or union bosses. If you try to move from pensions to superannuations, you are in a problem. Your current crop of workers need to pay for their parents/grandparent generation of pensioners while saving for their own retirement as well. Australia is lucky to have the system it does.