US Retirement System Gets a C+
Social Security

US Retirement System Gets a C+

© Charles Platiau / Reuters

With a mix of mandatory public and private pension programs, the Netherlands has the world’s best retirement system, according to a new ranking from the consulting firm Mercer. The European nation earned top marks among the 47 retirement systems included in the annual survey, sharing an “A” grade with Iceland, Denmark and Israel, each of which provides a “first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.”  

The U.S., on the other hand, is nowhere near the top, ranking 22nd, with a grade of just C+. The U.S. earns middling marks on the three components of the index, which weighs the adequacy, sustainability and integrity of each nation’s system. While many white-collar workers in the U.S. have access to sufficient retirement resources through Social Security and 401k plans, millions of gig and blue-collar workers face significant shortfalls and limited options.

Still, there are worse systems. Argentina ranked last, due to its limited public pension system and a private system that is entirely voluntary. Other bottom-tier retirement setups include those run by India, Turkey and Thailand.

Overall, most national retirement systems – which typically provide a mix of private and public resources – are under pressure around the world due to inflation, higher interest rates, rising debt levels and geopolitical instability. That means that millions of workers will have to rely on their own resources when they are older, continuing a trend that has been developing for decades.

“The bottom line is around the world, people have to start looking after themselves in retirement,” David Knox, the report’s lead author, told Bloomberg. “We can no longer just rely on social security or public pensions.”

The complete Mercer CFA Institute Global Pension Index is available for download here