The U.S. may be the richest country in the world, but its retirement system sure doesn’t show it. Once again, the United States earns an embarrassingly low overall score (63.0), ranking No. 22 out of 47 national pension systems, covering 64% of the world’s population according to Mercer’s retirement research. The three highest-ranking countries on the list for retirees are the Netherlands (85.0), Iceland (83.5) and Denmark (81.3). Australia came in fifth (77.3), the UK 10th (73.0) and Canada 12th (70.2). Argentina had the lowest index value (42.3).
The information for this original article by Lorimer Wilson, Managing Editor of munKNEE.com – Your KEY To Making Money! – was sourced from an article by Pete Grieve and Julia Glum.
The United States now lands outside the top 20 countries in a new ranking of 47 national pension systems in the 2023 edition of the Mercer CFA Institute Global Pension Index, which analyzes countries based on more than 50 indicators in three categories: adequacy, sustainability and integrity.
The U.S. scored its highest rank (16th) in the sustainability category, which measures the likelihood of a country’s pension system being able to provide strong benefits in the future. This sub-index includes contribution rates, coverage of the private pension system and government debt, among other factors.
The U.S. ranked 24th in the adequacy category which judges the extent to which pension systems provide sufficient retirement income. This category includes taxation incentives and vesting rules for retirement income programs.
The integrity sub-index is about the regulation of retirement income programs, especially private-sector pensions and the laws that govern them and the U.S. ranks 41st here.
The report provides several recommendations it says could help the U.S. increase its scores, including improving retirement income for lower-income people and limiting access to funds before retirement.