US - A universal pension scheme has been suggested to address problems in the US retirement system, as part of a discussion paper published by economic and social policy research body Urban Institute.
It was written by Adam Carasso, research director for the Fiscal Policy Program at the New America Foundation, and Jonathan Forman, professor of law at the University of Oklahoma and vice chair of the Oklahoma Public Employees Retirement System.
They claimed a broad recasting of the nation's present social insurance programs was needed to address the breach between the retirement Americans desired and the retirement that current systems could finance.
"A key element of this greater reform could be the establishment of a universal pension system (UPS), to ensure that all workers are covered by a pension and are able to save more during their working years to provide them with adequate incomes when they retire," the report said.
"Additionally, this kind of universal pension system could provide needed retirement income for millions of employees of small and medium-size firms that currently do not offer pension plans."
The paper provides options for a system of individual accounts to which each employee or self-employed worker would be required to contribute 3% of covered payroll.
It said these accounts could be held by the government, invested in a broadly diversified portfolio of stocks, bonds, and government notes, annuitised on retirement.
"The rewards of a UPS would be seen over the long term," the report stated. "Under current law, an average-wage man retiring at age 65 in 2065 will receive social security benefits that replace 34.6% of his pre-retirement wages - provided that action is taken to restore solvency to the Social Security program.
"Otherwise, Social Security will see a shortfall and be able to replace only 25.4% of this worker's final wages. However, we estimate that a UPS could replace an additional 14.4% of final wages for all men retiring at 65 and 13.3% of final wages for all women."
The Next Generation Pensions Committee is on a mission to promote and encourage younger voices in the industry. Kim Kaveh looks at its key objectives
This week's top stories included an analysis finding the cost of equalising guaranteed minimum pensions in schemes could hit FTSE 100 profits by up to £15bn.
Employers whose dividend to deficit recovery contribution (DRCs) ratios fall outside the "normal range" should expect to see higher regulatory scrutiny, although no fixed ratio will be set.
Investment consultants and fiduciary managers should expect a final decision on the investigation into the market to be published by the end of the year, the competition watchdog says.