Report Says Politics Slowing World Retirement Reform
World financial services companies managed $11.9 trillion in “addressable” retirement assets in 2001, down 3% from 2000, according to a new global retirement market report from Cerulli Associates Inc., Boston.
Reformers throughout the world are promoting defined-contribution retirement savings programs that could dramatically increase the amount of retirement assets flowing into privately managed funds. But Cerulli analysts warn in their report that local politics are slowing the reform efforts.
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“Inherent in pension reform is the message that individuals must invest for their retirement as the level of state provision is set to decline,” the analysts write. Nevertheless, in spite of the obvious need for reform, “the appetite for reform varies from country to country, as does the success of various initiatives.”
In Australia, for example, the government has required employers to contribute a portion of workers salaries to private pension funds for the past 10 years. This year, the Australian government increased the contribution requirement to 9%.