November 8th, 2011
Econintersect: Last week results a survey were released by Mercer, the global Human Resources and related financial advisory subsidiary of Marsh & McLennan Companies, and the MercerAustralian Centre for Financial StudiesAustralian Centre for Financial studies. The survey ranked the retirement systems of 16 countries that include 50% of the world’s population. The top ranked pension indexes belong to Netherlands and Australia. The lowest rankings go the India, Japan and China. The U.S. is ranked tenth. Follow up:
Follow up:The ranking system considers private group pensions, private individual retirement savings and public pension funds, such as Social Security in the U.S. From Advisor One:
Each country was given a score between zero and 100. The overall index value represents the weighted average of the three sub-indices–adequacy, sustainability and integrity.
As for the dismal appearance of the Unites States in the ranking’s bottom half, the authors suggest methods for improving the system, which include:
- Raising the minimum pension for low-income pensioners;
- Adjusting the level of mandatory contributions to increase the net replacement for median income earners;
- Improving the vesting of benefits for all plan members and maintaining the real value of retained benefits through to retirement;
- Reducing pre-retirement leakage by further limiting the access to funds before retirement;
- Introducing a requirement that part of the retirement benefit must be taken as an income stream.
Click through to Advisor One to read detailed summaries for the top ten countries.