America Gets Bad Retirement News

The United States received a C+ rating for its retirement income system in a new survey.
In its 2024 Global Pension Index, Mercer CFA ranked the U.S. 29th out of 48 countries for its retirement income systems, including government retirement provisions and private sector pension plans. The report says a C or C+ ranking is awarded to systems with “some good features but also has major risks and/or shortcomings that should be addressed; without these improvements, its efficacy and/or long-term sustainability can be questioned.”
This year, America’s overall ranking dropped from an overall score of 63 to 60.4, based on three indexes:
“The American retirement system’s C+ rating is an accurate depiction of the ongoing challenges in ensuring long-term financial security for retirees, and there is a substantial amount of work to be done,” Kashable co-founder and CEO Einat Steklov told Newsweek.
She said that “significant gaps in accessibility, adequacy, and education in the U.S. system” and the shift from defined benefits to defined contributions over the years has “fundamentally transformed the retirement landscape.”
Steklov said this shift leaves “individual employees responsible for decisions and assessments that, for decades, were handled by corporations and investment professionals.”
“Planning for retirement is now an incredibly complex task, often beyond the reach of the average person, especially when balancing the need for immediate financial stability with the importance of long-term savings,” she said.
Only four countries—the Netherlands, Iceland, Denmark and Israel—earned an A ranking for their retirement systems, which Mercer CFA defines as a “first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.”
“One thing that stands out is that many top-ranking countries combine strong public pensions with incentives for private savings,” Brandy Burch, CEO at Benefitbay, told Newsweek. “In the U.S., we have Social Security, which provides a basic safety net, but it wasn’t designed to be the sole source of retirement income. Expanding this program or enhancing its benefits could improve retirement security for millions.”
The Netherlands, the number one country according to the report, has a defined contribution retirement system. However, according to Mercer CFA, the European country is “moving from a mostly collective benefit structure to a more individual defined contribution (DC) approach.”
Burch said the American retirement system isn’t all bad—especially in the private sector.
“The rise of 401(k) plans and IRAs has provided people with more flexibility in retirement savings, and features like automatic enrollment and employer match contributions have encouraged more people to participate,” she said. “There’s a lot of potential if we continue to support employers in offering these plans and even look at extending similar savings opportunities to those who don’t have access to a workplace retirement plan.”
India, Argentina and the Philippines were the bottom three countries, all being awarded D ratings. Their systems had some “desirable features” but also “major weaknesses and/or omissions that need to be addressed.”