While the U.S. faces a retirement crisis, other countries have implemented programs that provide a better level of economic security in retirement. As compared to the U.S., Australia, Canada, and the Netherlands provide higher retirement income for citizens through social security and universal/quasi-universal employer retirement plans.
These findings are in a new research brief, Lessons for Private Sector Retirement Security from Australia, Canada, and the Netherlands authored by John A. Turner, PhD, Pension Policy Center director, and Nari Rhee, PhD, National Institute of Retirement Security manager of research.
"Americans are struggling to save for retirement," says Rhee. "The typical family has only a few thousand dollars saved. Yet, other advanced countries are doing a far better job of enabling older populations to have economic security in retirement. We hope our research provides insight and ideas for U.S. policymakers working to improve Americans' economic insecurity." Download the full research brief.
The National Institute on Retirement Security originated the content of this post.
Since the end of the recession more people are working for employers that offer retirement plans, and plan participation is up, according to a new report from the nonprofit Employee Benefit Research Institute — but most workers still have no retirement plan.
The data in the report is from the U.S. Census Bureau's latest Survey of Income and Program Participation (SIPP) on retirement plan participation, covering December 2011 to March 2012.
Some key takeaways are:
- 61 percent of all workers over age 16 had an employer that sponsored a pension or retirement plan for employees in 2012, up from 59 percent in 2009.
- Workers participating in a plan increased to 46 percent in 2012, up slightly from 2009 (45 percent) but below 2003 (48 percent).
- The vesting rate (the percentage of workers who say they were entitled to some pension benefit or lump-sum distribution if they left their job) stood at 43 percent in 2012, up from 24 percent in 1979.
- This change is largely due to the increased number of workers participating in defined contribution retirement plans (such as 401(k) plans), where employee contributions are immediately vested, and faster vesting requirements in private-sector pension plans.
- 401(k)-type plans were considered the primary plan by 78 percent of workers with a plan. Defined benefit (pension) plans were the primary plan for 21 percent of workers.
Take a look at notes from the Retirement Plan Participation: Survey of Income and Program Participation (SIPP) Data, 2012.
Last week, there was a Kodak moment that all of the company's employees and retirees could be proud of.
On Tuesday, Eastman Kodak Co., known for its iconic film business, ended a 20 month bankruptcy proceeding with its two pension plans intact. That means the nearly 63,000 people covered by those plans will have a more secure retirement.
When companies seek bankruptcy protection it doesn't automatically mean that plans will be shut down and come to us. During Kodak's bankruptcy, we were on the unsecured creditors committee and we worked with them to ensure the plans would continue.
For more than 100 years, every Labor Day, America has celebrated working people's contributions. Labor Day is observed and celebrated in different ways all across the country by people in every walk of life. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.
And after our working lives, we can continue to contribute to the country's strength and prosperity through secure retirements. When retirees can rely on their own secure retirement income, the economy wins, and that means workers win too.
PBGC wishes every American a safe and happy Labor Day. We reaffirm our commitment to protecting the more than 40 million American workers in private pension plans, to paying benefits for a million and a half people whose companies could not, and to fighting for American retirement security as part of every worker's American dream.
For a more in-depth look at the meaning of Labor Day, visit DOL's Labor Day 2013 webpage.
The proposed Secure, Accessible, Flexible and Efficient (SAFE) Retirement Plan is outlined in the Center for American Progress's (CAP) report "American Retirement Savings Could Be Much Better." The SAFE Plan would combine elements of a traditional defined benefit pension — including regular lifetime payments in retirement, professional management, and pooled investing — with elements of a defined contribution plan, such as predictable costs for employers and portability for workers.