Nevin's Data "Points"

A recent analysis of world pension systems gave America a passing grade, but not a good one. The latest—the Mercer CFA Institute Global Pension Index [i] —gave the United States a C+ (though a B in adequacy!) ranking our retirement “system” well down (22 nd ) in the list of 47 retirement income systems around the world.  This particular index is comprised of three sub-indices: adequacy, sustainability and integrity, which the authors say are used to measure each of the retirement systems against some 50 “indicators.” [ii] Of course, people are entitled to establish whatever criteria they think is reasonable in such matters, but those who would accept their grading at face value would be well-advised to consider both the assumptions and weighting applied to derive those outcomes. To the sponsors’ credit, the 144-page document provides lots of opportunity to do just that. Perhaps the biggest challenge of a system like ours matched up against some of these other systems i...

A recent report by the GAO paints a pretty bleak picture of American retirement. Is it accurate? For the most part, the report  covered familiar ground, bemoaning the “marked shift” away from the traditional defined benefit pension plan (glossing over how few private sector workers were covered by these plans, even in their heyday, and the fraction of those who received a full pension), and highlighting low savings rates, the pervasive lack of broad-based access to workplace retirement plans and the daunting challenges confronting even those who do enjoy that access. The report also spends several of its 173 pages chronicling (with pictures) the ways in which “leakage” also undermines retirement savings. And for good measure, it invokes the findings of the Melbourne Mercer Global Pension Index   — which the GAO calls the “most comprehensive” — that ranks the U.S. retirement system 20th out of 25 countries surveyed (and gives us a “C” grade). Indeed, ...