September 6, 2013 (PLANSPONSOR.com) – A new report suggests the United States can learn some good lessons about retirement from other countries.
Research from the National Institute on
Retirement Security (NIRS) finds that while the U.S. faces a retirement crisis, other
countries have implemented programs that provide a better level of economic
security in retirement. For example, Australia, Canada and the Netherlands
provide higher retirement income for more of their citizens through their
social security and universal/quasi-universal employer retirement plans.
The paper, “Lessons for Private Sector Retirement Security
from Australia, Canada, and the Netherlands,” was written by John A. Turner, director
of the Pension Policy Center, and Nari Rhee, manager of research for NIRS.
“Americans are struggling to save for retirement. The
typical family has only a few thousand dollars saved and the U.S. retirement
savings deficit is somewhere between $6 and $14 trillion. Yet, other advanced
countries are doing a far better job of enabling older populations to have
economic security in retirement,” said Rhee.
Rhee added that the research done for the paper showed U.S. policymakers should look to successes in Canada, Australia and the
Netherlands to “help get our retirement system back on track.”
“While each country is unique, it’s clear that
universal coverage and risk sharing are essential success factors in the three
countries we studied. In sharp contrast, the U.S. system for private sector
employees has low rates of retirement plan coverage. Furthermore, the
large-scale shift from pensions to 401(k) accounts has shifted almost all of
the funding, investment, and longevity risks to employees. So it's not
surprising that the U.S. lags behind other advanced nations, and that we have
pronounced retirement insecurity for a majority of the U.S. workforce,” said Rhee.