Each year, we report on the annual Mercer Global Pension Index, hoping that the state of the US retirement system will have improved. Alas, the report for 2024 is out and the US’ rating has continued to drift downward, to a C+, or 29th out of the 48 rated countries. Who is #1? Those Dutch again, closely followed by Iceland, Denmark, and Israel.
The score for the US fell in all three rated categories (Adequacy, Sustainability, and Integrity), which Mercer attributed largely to updating of OECD data rather than any material changes in practices or new weaknesses in the system - but a C+ is still a C+.
We have mixed feelings about rankings to begin with – we dislike the US News college rankings, and don’t even get us started on the College Football Playoff rankings, but we could spend all day on the Rolling Stones ranking of the greatest artists of all time. The Mercer rankings do offer some valuable insight into where the US system continues to fall short. And if you want to know how to improve our retirement system, here is what Mercer suggests:
Raising the minimum pension for low-income pensioners
Improving the vesting of benefits for all plan members and maintaining the real value of retained benefits through to retirement
Reducing preretirement leakage by further limiting access to funds before retirement
Introducing a requirement that part of the retirement benefit be taken as an income stream