Benefits

U.S. Can Learn from Retirement Programs Abroad

September 6, 2013 (PLANSPONSOR.com) – A new report suggests the United States can learn some good lessons about retirement from other countries.

By Kevin McGuinness editors@plansponsor.com | September 06, 2013
Page 1 of 2 View Full Article

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.

SPONSORED MESSAGES