The pension industry should offer a new standardised fund with lower charges to help employees save an additional $40,000 (US$33,700) for their retirement, according to a government-commissioned review overseen by Jeremy Cooper, former deputy chairman of Australia's markets regulator.

The present system is too costly, complicated and does not always put member concerns first, the review said on the country's $1.1 trillion pension system.

"Every dollar we save in unnecessary fees and costs will help Australian's retirement savings go further," Minister for Financial Services, Superannuation and Corporate Law Chris Bowen said in a statement today.
According to him, the government will look upon the recommendations before giving a response.

Australians will have $6.1 trillion in pension savings schemes by 2035, from $1.1 trillion in July, based on the report. The introduction of the new option, called MySuper, may reduce the fees savers pay by as much as 40 percent, and increase their balance at retirement by 7 percent.

MySuper will produce long-term savings of about $2.7 billion and make back-office operations more efficient, according to the report.

Australian employers make compulsory pension fund contributions of 9 percent of each person's salary. That will increase to 12 percent by the 2020 financial year, Treasurer Wayne Swan said May 2.

As much as a quarter of Australia's population will be 65 years old or over by 2056, according to the statistics bureau.