Can an Australian Pension Scholar Help Israel About Growing Old Without Poverty? |
Israel has a pension problem hiding in plain sight. The country’s market-income poverty rate among the elderly is the lowest in the developed world — barely half of over-65s fall below the poverty line before government transfers, thanks to high rates of private pension coverage. Yet the welfare state does remarkably little with that advantage. Israel’s National Insurance Institute recorded elderly poverty at 12.8 percent in 2023 — above the OECD average of roughly 15 percent. And when the Taub Center for Social Policy Studies applied the OECD’s own equivalence scale to Israeli data, the figure rose to approximately 20 percent, placing Israel among the worst performers in the developed world. Israel’s public transfer system reduces elderly poverty by only about 59 percent — compared with reductions of 80 percent or more in most Western European economies.
In the language of option pricing — a framework I have applied extensively to geopolitical risk — Israel’s pension system has written a naked put on its own elderly. The state has sold away its obligation to provide a floor under retirement income without purchasing the hedge. When markets fall, when careers are interrupted by reserve duty or conflict, when inflation erodes real balances, the losses pass straight through to the individual.
Into this uncomfortable space steps the work of John Piggott AO, Scientia Professor of Economics at the University of New South Wales and one of the most influential pension economists alive on the planet. Piggott’s career offers Israel not a blueprint to photocopy, but a set of hard-won principles about how nations can — and cannot — design their way out of old-age insecurity.
A career at the intersection of theory and practice
Piggott is not a theorist who publishes from a safe distance. He has advised the Japanese government on pension restructuring, evaluated World Bank pension assistance across Asia, co-chaired the G20’s Think20 Task Force on Aging Populations during Japan’s 2019 presidency, and served as a Commissioner on the US National Academy of Medicine’s International Commission on Healthy Longevity. He sat on Australia’s landmark Henry Tax Review and spent five years on the Ministerial Superannuation Advisory Committee. In 2020, he was made an Officer of the Order of Australia for distinguished service to education, population ageing research, and public finance policy. In 2024, UNSW awarded him its Business School Lifetime Achievement Award for Impact.
What makes his work distinctly relevant to Israel is its focus on the junction where retirement........