Retirement seems to be a universal milestones workers look forward to no matter where they are in the world. Most countries have some sort of pension or Social Security system to accommodate for this dream, but not all of them were created equal. Mercer CFA has published its 2024 Global Pension Index and the U.S is not at the top of the list.

Ranking at 29th out of 48 countries and with an overall C+ grade, the report described the U.S’s retirement system as having “some good features but also has major risks and/or shortcomings that should be addressed; without these improvements, its efficacy and/or long-term sustainability can be questioned.” In fact, compared to last year’s report, the country dropped from an overall score of 63 to a score of 60.4, based on three indexes:

• Adequacy: is a measure of how well the system provides for retirees, ensuring they have enough income in their later years.
• Sustainability: looks at whether the system can keep functioning as the population ages, considering factors like the old-age dependency ratio (the number of working-age people compared to retirees), public pension spending, government debt, and inflation.
• Integrity: focuses on the system’s regulation and governance, ensuring members are protected from risks and have access to clear information about their plans, especially in the case of private pensions.

After the publication of the report several experts commented on the findings, with Kashable co-founder and CEO Einat Steklov being one of the prominent voices that stated “The American retirement system’s C+ rating is an accurate depiction of the ongoing challenges in ensuring long-term financial security for retirees, and there is a substantial amount of work to be done […]Planning for retirement is now an incredibly complex task, often beyond the reach of the average person, especially when balancing the need for immediate financial stability with the importance of long-term savings”

She further commented on the changes that have “fundamentally transformed the retirement landscape”, blaming it to “significant gaps in accessibility, adequacy, and education in the U.S. system” and the shift from defined benefits to defined contributions that have left “individual employees responsible for decisions and assessments that, for decades, were handled by corporations and investment professionals.”

Comparing the US social Security system to others

None of this bodes well for the future of the pension system in the U.S, especially when compared to the countries that earned an A ranking on the report, the Netherlands, Iceland, Denmark and Israel thanks to their “first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.” according to the Mercer CFA report.

Brandy Burch, CEO at Benefitbay also contributed to the comments by stating “One thing that stands out is that many top-ranking countries combine strong public pensions with incentives for private savings. In the U.S., we have Social Security, which provides a basic safety net, but it wasn’t designed to be the sole source of retirement income. Expanding this program or enhancing its benefits could improve retirement security for millions.”

Although Burch does not believe it is all bad, according to her “The rise of 401(k) plans and IRAs has provided people with more flexibility in retirement savings, and features like automatic enrollment and employer match contributions have encouraged more people to participate. There’s a lot of potential if we continue to support employers in offering these plans and even look at extending similar savings opportunities to those who don’t have access to a workplace retirement plan.”

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After all, no plan is perfect, even the Netherlands, which got the A on the report is changing the way it has functioned for decades and “moving from a mostly collective benefit structure to a more individual defined contribution (DC) approach” according to Mercer CFA.

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