The UK can learn from Australia on what to avoid when reforming its pension system, rather than just replicating the Australian model, according to Hostplus former group executive, Paul Watson.

Speaking at the PLSA Annual Conference, the former group executive of the Australian superannuation fund stated that he felt “a bit self-conscious” on behalf of the Australian pensions industry as it had been placed on “a bit of a pedestal” by other jurisdictions.

“No jurisdiction has mortgage on good ideas,” he continued. “I think the best thing that the Australian system can do in terms of its experience is probably not so much in what we did and replicate and copy it, it’s what could we help you avoid. What were our pitfalls? What were our dead-end cul-de-sacs that we went down?"

Watson noted that, in hindsight, Australian supers can help the UK in reforming its pension system because the models are overlapping and related in terms of moving through some of the challenges they have had to deal with.

“I think that’s the best thing we can do in terms of that bilateral conversation,” Watson said.

“When I hear things like Mansion House last year, it’s great to have a light in the distance and say: ‘Let’s do that’, but I sat back and went: ‘That was an overnight success that took 15 years to do’.

“That’s where I think we can share from our learned experience and some of the pitfalls. You can get to some of those points quicker than we did, for the benefit of the industry and the ultimate consumer.”

Also heading up the session was People's Partnership chief executive, Patrick Heath-Lay, who argued that there was a lot that the UK could learn from Australia, particularly when it comes to highlighting value in the product.

"'Net Benefit' has been a huge success story and has contributed to the high expectations that Australian savers have of their pension funds," he continued.

"In the UK, competition in the pensions market focuses too heavily on cost and non-investment proposition factors and this must change.

“Our experience with members transfers is the vast majority of people don’t consider investment returns or the impact of charges when transferring their pension. It’s vital that savers have a much better understanding of the real value offered by their pension provider – the return their pension is providing them – before considering factors like service and engagement.

“While a VFM framework is being developed for providers, a consumer-friendly version is expected, and we believe a measure like Net Benefit could be a useful consideration. We’ve been working with partners in Australia to explore what this could look like and what would be needed to bring this in in the UK.”

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