According to CBS News, the United States received a C+ largely due to the stratification embedded in the dual retirement systems it employs.
The report lists a C+ rating: “A system that has 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.”
As Katie Hockenmaier, the U.S. defined contribution research director for Mercer, told CBS News, “Retirement savings coverage and institutional quality retirement vehicles remain out of reach for many Americans, creating a significant adequacy gap that needs to be addressed.”
Furthermore, Hockenmaier says the findings of the institute’s study indicate an “urgent need for action.”
Mercer suggests raising the minimum payment for low-income retirees and creating a system that places part of a worker’s retirement benefit into an income stream, like a residual payment.
The United States ranks 22nd in Mercer’s overall index out of 47 countries it surveyed, which is in line with its C+ rating, placing it around the middle of the pack. In its featured chapter discussing the impact of artificial intelligence on retirement systems, Mercer’s report says it will have a tremendous impact on how pension and Social Security systems function, “Artificial intelligence (AI) has been with us for years and is affecting our lives in many ways, from the use of search engines to institutional investment decisions. Yet, during the next decade, its prevalence is likely to increase significantly so that it will affect every aspect of our pension and social security systems.”
Overall, the chapter strikes a hopeful tone that the expansion of AI in the retirement system will be used to benefit retirees.
Source: Black Enterprise