U.S. Fares Poorly in Global Pension Evaluation

November 8th, 2011
in econ_news

old-man 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:

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.

Sources:  Melbourne  Mercer Global Pension  Index Report 2011 and Advisor One

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1 comment

  1. Explorer says :

    And Australia is proposing to increase compulsory superannuation contributions from 9 to 12% of taxable income.

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