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U.S. Retirement System Weak in Rankings

BOSTON (TheStreet) -- In recent days, the streets of France have been clogged with protests -- some violent -- in part because of a proposal to raise the national retirement age.

The furor over a proposal to raise the pension threshold to age 62 from 60 by 2018 is not likely to garner much sympathy from the many Americans struggling with a self-directed 401(k) and the ability of Social Security to meet their needs.

Unmoved as they may be by the plight of French workers, how does the U.S. stack up against the rest of the world when it comes to retirement issues?

Not that great -- sixth overall and ninth in "adequacy of benefits."

In the U.S., Social Security payments can be collected, at a reduced rate, from the age of 62. For those born before 1960, the age to collect the maximum benefit is 66; it's 67 for those born later.

Throughout Europe, countries are considering a boost in the retirement age to maintain the critical balance between pensioners and workers, an equation thrown out of whack by increasing life expectancies. Germany is gradually boosting the retirement age for pension participation to 67 from 65 from 2012 through 2029. Spain plans to go to 67 from 65. The British government will up its retirement age to 68 from 65 by 2046, and there are already debates over whether to push it as high as 70.

Greece is on track to increase its age requirement to 63 from 61 by 2015 in response to its ongoing economic woes.

In the U.S., the standard goal for retirement is to replace 70% of average annual income. In Italy, government pensions offer an 89% replacement on average. France, however, offers a less-generous 60% ratio and Germany an even lower 53%.

In a study last October by Mercer, a subsidiary of Marsh & McLennan (MMC) and global provider of consulting, outsourcing and investment services, the U.S. ranked sixth among 11 countries evaluated on more than 40 factors intended to gauge public and private pension plan adequacy, sustainability and integrity. The index was billed as the first time the world's retirement income systems have been compared and ranked on a basis that considers a retirement income system in its entirety.

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