By: Russ Kamp, CEO, Ryan ALM, Inc.

I happened to stumble over this quote in a recent Linkedin.com posting: The US retirement system is the envy of the world, and it is largely thanks to the continued success of 401(k)s! Wow, that pronouncement isn’t close to being accurate. Yes, that is my opinion, but it is supported by the annual work of Mercer and the CFA Institute that provide a global view on retirement systems and retirement readiness. I last published a post on this subject following the release of the 2024 study, in which I stated “I don’t know about you but if I had scored a 60 (actual score was 60.4 based on a scale of 0-100) during my school days, my letter grade would have likely been an F. Based on how I feel that we are prepared as a nation, I think that an F is much more appropriate than a C+. What about you?”

Well, that 60.4% retirement score had us below the average ranking of 63.4 and placed us 29th out of 48 countries in the study. That doesn’t seem like we’d be the envy of any country placing above us. Furthermore, the 2025 study shows a slight improvement in our overall score to 61.1, but the average score also improved to 64.6, and worse, with the addition of four more countries in the survey, we now rank 31st out of 52. That is shockingly poor, especially given the financial resources that we have as a country.

So, NO, the U.S. retirement industry is not the envy of the world. Far from it, in fact. With regard to the continued use of 401(k)s cited above, we took a program designed to be a supplemental “benefit” and replaced the primary source of retirement security (DB pension plans) and in the process dramatically reduced the security that American workers would have had if DB pensions were still utilized. As I’ve stated numerous times, asking untrained individuals to fund, manage, and then disburse a “retirement” benefit with little disposable income, no investment acumen, and NO crystal ball to help with longevity, is a silly initiative.

For us to become the “envy” of the retirement world, we are going to have to reestablish DB plans as the core retirement benefit. For those reluctant to reinstitute or initiate a DB pension, some 20 states have begun to use IRA-type programs for those workers not currently participating in an employer-sponsored plan. Getting many more folks active in retirement savings will go a long way to seeing the U.S. rank approach envy status.