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FT: US Pension System Deteriorates in Global Survey

FT: US Pension System Deteriorates in Global Survey

By    |   Monday, 19 October 2015 12:55 PM

Even though the U.S. economy bounced back from recession in 2009, the health of the country’s pension system has deteriorated since the end of the financial crisis.

The U.S. dropped to 14th place among the 25 countries covered by the latest Melbourne Mercer Global Pension Index, which measures the health of pension systems, according to the Financial Times. The overall score for the country fell to 56.3 currently from 59.8 in 2009, when the study was first published.

The S&P 500 stock index has tripled in value to about 2,030 since reaching an intraday low of 666 points on March 9, 2009, as the U.S. economy grappled with the deepest recession in 80 years. The stock benchmark reached a record closing high of 2,130.82 on May 21.

David Knox, senior partner at Mercer said the U.S. could improve pensions several ways.
“Raising the minimum pension for low-income pensioners, raising mandatory contribution levels and improving the protection of benefits that a scheme member accrues would all be improvements,” he told the FT.

The Mercer study confirms findings by Fitch Ratings, which this month published a study on the funding levels of state-run public pensions.

The median funded ratio for state retirement systems was 71.5 percent in 2014, "nearly unchanged" from the previous year, Fitch said. The median ratio reached a high of 84.7 percent in 2007 and fell to a low of 68.9 percent in 2012, according to Reuters.

"Several years of strong market gains through 2014 offset remaining market declines and steadily rising liabilities, thus lifting reported funded ratios slightly, but they remain well below pre-recession highs," Fitch said in the report.

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Even though the U.S. economy bounced back from recession in 2009, the health of the country's pension system has deteriorated since the end of the financial crisis.
pension, retirement, study, investment
274
2015-55-19
Monday, 19 October 2015 12:55 PM
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