The United States of America 2011

The United States’ retirement income system comprises a social security system with a progressive benefit formula based on lifetime earnings, adjusted to a current dollar basis, together with a means-tested top-up benefit; and voluntary private pensions, which may be occupational or personal.

The following table shows the position of the United States when compared to the 15 other countries and some of the indicators that either scored relatively well or poorly.

The overall index value for the American system could be increased by:

• raising the minimum pension for low-income pensioners
• adjusting the level of mandatory contributions to increase the net replacement for median-income earners
• improving the vesting of benefits for all plan members and maintaining the real value of retained benefits through to retirement
• reducing pre-retirement leakage by further limiting the access to funds before retirement
• introducing a requirement that part of the retirement benefit must be taken as an income stream

The American index value increased slightly from 57.3 in 2010 to 58.1 in 2011 due to an increase in the adequacy sub-index which was partly offset by a decline in the sustainability sub-index due to a fall in asset values and a rise in government debt.