The future of retirement security: An international comparison through the lens of adequacy, sustainability, equity and plan design

Countries around the world are reforming their retirement systems to account for increases in longevity and other demographic and economic pressures.

Summary

The average retiree can now expect to spend about two decades in retirement, roughly double the time from 50 years ago. Along with extended lifespans, the number of workers per retiree is declining around the world and ever fewer workers have access to defined benefit (DB) plans that promise a guaranteed income in retirement. Instead, most workers save for retirement through defined contribution (DC) plans, which do not automatically convert savings into income. This report examines how seven countries have adapted their retirement systems to account for these and other challenges.

Key Insights 

• To finance retirement in today’s environment, successful countries have adopted a hybrid model that combines the best elements of DB and DC plans.
• Key features of successful retirement systems are universal participation; adequate contribution rates; risk sharing between participants, employers and governments; flexibility and portability; and strong fiduciary oversight, plan design and advice.
• The retirement systems studied all have strengths and weaknesses, and countries can learn important lessons from others’ experiences.

Methodology

The authors developed a framework outlining the four key attributes of successful retirement systems—adequacy, sustainability, equity and plan design—and then used OECD data to assess the systems of Australia, Canada, the Netherlands, Singapore, Sweden, the United Kingdom and the United States