Pension bashing by those who ought to see how they live on the other side of the pond...
Thanks to Dr. Leone (who forwarded this article to me) we get a picture of pension comparisons not as state vs. state but......as country vs. country.
Many times I have distributed articles detailing how many European countries have far superior health care coverage to ours, live 2-3 years longer and have lower infant death rates than we do in our "good ole' U.S. of A." The statistics are out there but many among us prefer not to get their head out of the sand or...know it but won't admit it. Well.....the same pretty much applies to pensions...both private and public. Read this for a real case of "pension envy."
June 29, 2012
By Dinah Wisenberg Brin, CNBC.com
US retirement trails other nations'
When compared with similarly wealthy nations, the United States comes up short on its benefits for retirees in a few key areas.
Comparing the fortunes of U.S. retirees with their counterparts in other wealthy nations can be challenging, given differences in public and private benefit programs, the age at which citizens leave the workforce, and various pension reforms of recent years.
Generally, though, many economists view public retirement benefits in the United States as less generous than those in other wealthy nations.
The gaps may be narrowing, though, as other countries -- many of which have long had younger retirement ages -- seek to adjust their systems.
"There's a much richer support network in Europe than there is here," says Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology.
U.S. Social Security Insurance benefits typically replace less than half the income Americans earned on the job, while in Europe, similar benefits often account for at least two-thirds of pre-retirement income, says Gruber.
"We always are neck and neck with the United Kingdom, but other than the U.K., I think we are among the stingiest," adds Alicia Munnell, the director of the Center for Retirement Research at Boston College.
U.S. support for retirees remains below the average for its fellow Organisation for Economic Co-operation and Development member countries at every income level, says Munnell.
US ranking in OECD study
In addition, U.S. public pension spending amounted to 6% of gross domestic product in 2008, less than the 7% average for all OECD countries.
National comparisons depend in part, however, on whether public or private pensions are considered, and on which aspects of retirement benefits are measured.
Among the 34 member OECD countries, the net replacement rate -- retirement income as a percentage of pre-retirement income -- for an average earner is 50% from public pensions alone and nearly 68% when mandatory private pensions are included, according to a 2011 OECD report.
The United States slightly trails the 50% average for public pensions only, at 47.3%, the report showed.
Austria's rate was nearly 90%, Italy's 72%, Hungary's 62%, Portugal's 70%, Germany's 56%, Spain's 85%, France's more than 60%, the United Kingdom's more than 37%, Denmark's 33%, Luxembourg's 94% and the Netherlands' 33.1%. Japan's public pension replacement rate is 40%, Korea's 47.5%.
The United States has no mandatory private pensions. In some of the countries that do, such plans significantly boost the income replacement rate.
Australia's replacement rate, for instance, is 59%, counting public and mandatory private pensions. Denmark's is 90%, Hungary's is 106% and the Netherlands' almost 100%.
Replacement rates assess benefit levels at retirement. The OECD report also measures gross pension wealth -- the value of lifetime flow of retirement income -- and found that average-earning men in member countries received 9.6 times annual earnings, while women, because of longer life-expectancy rates, received 11.1 times annual earnings