How does social security compare to the pension programs of other countries? – Community News
Social Security

How does social security compare to the pension programs of other countries?

Grade B

A system with a solid structure, with many good features, but with some points for improvement.

Index Value: 65-75

To land: Finland, Sweden, UK, Singapore, Switzerland, Canada, Ireland, Germany, New Zealand, Chile

Grade C+

Index Value: 60-65

To land: Belgium, Hong Kong SAR, United States, Uruguay, France

Grade C

A system that has some good qualities, but also has major risks and/or shortcomings that need to be addressed. Without these improvements, long-term efficacy and/or sustainability may be questioned.

Index Value: 50-60

To land: UAE, Malaysia, Spain, Colombia, Saudi Arabia, Poland, China, Peru, Brazil, South Africa, Italy, Austria, Taiwan, Indonesia

Grade D

A system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its effectiveness and durability are questionable.

Index Value: 35-50

To land: Japan, Mexico, South Korea, Turkey, India, Philippines, Argentina, Thailand

Breaking it down

Averages across the index and sub-indexes were critical. For example, the average of all countries in the overall index was 61.0, while the United States got a ranking of 61.4.

However, a look at the adequacy, where the average was 62.2, the United States scored 60.9; the sustainability average was 51.7 overall, while the United States was 63.6; and for integrity the mean was 72.1 while the United States was 59.2.

Uruguay, which got the same figure as the United States, had a much higher Integrity ranking, 74.4, while Sustainability was much lower, 49.2.

Overall, it seems that most countries outperformed in 2021 in 2021. The United States’ score rose from 60.3 in 2020 to 61.4 in 2021. Peru, New Zealand, South Korea, Indonesia , India and Argentina all fell nearly a point or more in overall index rankings.

Recommendations

The study examines each country’s pension/social security issues, but generally makes some recommendations, including:

  • Increase coverage of employees (including non-standard workers) and self-employed in the private pension system, recognizing that many individuals will not save for the future without an element of coercion or automatic enrollment.
  • Raise the state pension age and/or retirement age to take life expectancy into account.
  • Promoting a higher employment rate in old age, in particular to save more and shorten the retirement period.
  • Encourage higher levels of private savings to reduce future reliance on public pensions, while also adjusting the expectations of many workers.
  • Introduce measures to reduce the gender pension gap.
  • Reducing leakage of retirement savings before retirement, especially through taxation.
  • Check the indexation of these pensions to ensure that the fair value is preserved.