While the U.S. faces a retirement crisis, other countries have implemented programs that provide a better level of economic security in retirement. As compared to the U.S., 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. …
In the United States (U.S.) private sector, low rates of retirement plan coverage and the large-scale shift from defined benefit (DB) pensions to defined contribution (DC), 401(k)-style individual investment accounts have resulted in almost all retirement funding, investment, and longevity risks being borne by workers. This has resulted in pronounced retirement income insecurity for a majority of the workforce. Some characterize this shift as an unavoidable response to current demographic trends and economic uncertainty. However, other advanced countries have endeavored to both meet these challenges and provide relatively broad retirement income security through their combined social security and employer-sponsored retirement systems.
This paper provides international perspectives on retirement security by outlining social security and universal, quasi-universal, and voluntary employer-provided retirement plans in Australia, Canada, and the Netherlands. These countries have levels of development similar to the U.S., and have established retirement income systems that are recognized for their high quality in terms of adequacy, sustainability, and integrity. The goal of this paper is to assess the level of security and risk provided by each country’s retirement system through the layers of income replacement provided by government, employer, and individual programs. In addition, this paper highlights key issues and lessons for consideration by U.S. policymakers and stakeholders.
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