America slipped down in Mercer’s annual ranking of countries’ retirement systems, to 22^nd out of 47 countries — with a grade of C+. This was down from No. 20 in Mercer’s 2022 report.

The Netherlands got the highest grade, A, in the ranking taking adequacy of a retirement system, its sustainability and integrity into account.

Other nations beating the U.S. were Australia (B+), Canada and Germany (both with a B grade).

The United States beat Saudi Arabia, Japan and China, which were each graded C. The five nations to get a D were: Thailand, Turkey, India, Philippes and Argentina. Russia was not included in the report.

The biggest challenges to retirement systems, says Margaret Franklin, president of CEO of the CFA Institute, are aging populations, shifting more of responsibility for saving to individuals from governments and/or employers, and inflation and rising interest rates.

Artificial intelligence could improve pension, Social Security systems and investment managers’ returns to improve retirees’ quality of life, this year’s report said.

“The ongoing expansion of AI within the operations and decisions of investment managers could lead to a more efficient and better-informed decision-making process, which could potentially lead to higher real investment returns,” said David Knox, senior partner at Mercer and lead author of the study.

A separate report from Vanguard this week found that income in the U.S. is directly related to how much people are able to save for retirement — and the lower their income, the greater their chances of a shortfall in retirement. For instance, those earning $42,000 or less a year, the 50^th percentile of earners, spend 83% of their income before retirement.

One solution, says Vanguard’s head of strategic retirement consulting, Dave Stinnett, is to expand the availability of 401(k) and other workplace savings plans and to automatically enroll workers in those plans.

Today, a full 42% of employer retirement plans still do not automatically enroll participants in their 401(k), Stinnett says.

Starting in 2025, however, the SECURE 2.0 Act of 2022 will require new workplace plans to automatically enroll workers.