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U.S. Retirement System Weak in Rankings

Within subcategories, the U.S. ranked ninth in "adequacy of benefits," meaning how much income is available to a retiree. And this specific data set was weighted most in the index, with the Netherlands, Canada and Sweden scoring highest.

The overall rankings were:

1. Netherlands

2. Australia

3. Sweden

4. Canada

5. United Kingdom

6. United States

7. Chile

8. Singapore

9. Germany

10. China

11. Japan

No country in the index was classed as having an "A-grade system." Mercer says this proves "even the world's most advanced pension models still need refinement to ensure they are robust enough to support the world's rapidly aging population." Countries with the lowest-ranking retirement income systems (Japan, China and Germany) could find that their "efficacy and sustainability will be in doubt if major weaknesses are not addressed."

The funding of defined-benefit plans in the U.S. and Social Security were cited as an ongoing challenge for the country in the study.

Recent research by Allianz Group (AZ) looked at the state of the global retirement market.

It found that, despite the effects of the worldwide financial crisis, the global retirement market is expected to grow 66% by 2020, to $45.8 trillion.

Covering slightly more than half of the world's total retirement assets last year, the United States was the leading retirement market in the world, followed at 11.5% held by the United Kingdom. Western Europe's combined retirement assets came to slightly more than 20%, while Australia and Japan each laid claim to 3% of the global market. The emerging economies of Asia and central and Eastern European countries, which are still in the early stages of building up individual funded pension systems, represented only minor shares (1.8% and 0.4%, respectively).

The U.S. retirement market is still expected to dominate the world pension market until the end of the decade, even though it is only expected to grow by a 3.6% compound annual growth rate, Allianz says.

-- Written by Joe Mont in Boston.

>To contact the writer of this article, click here: Joe Mont.

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