The United States of America 2010

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 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 medianincome 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; and
• introducing a requirement that part of the retirement benefit must be taken as an income stream.

The American index value fell from 59.8 in 2009 to 57.3 in 2010 due to the effects of the global financial crisis; namely a decline in asset values in 2008 and a rise in government debt.