News Column

U.S. Ranks No. 19 in Global Retirement Index

February 25, 2014

BOSTON--(BUSINESS WIRE)-- The United States narrowly holds its spot among the top 20 nations globally in its capacity to meet retirement security needs and expectations, according to the 2014 Global Retirement Index, published today by Natixis Global Asset Management. The U.S. scored 19th among 150 nations analyzed, as the benefits of increasing U.S. economic stability are moderated by the potential for rising interest rates and inflation, as well as persistent income inequality.

“The responsibility for financial security in retirement is falling even more heavily on individuals than ever before and this trend is likely to continue as government resources become more scarce,” said John T. Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia. “It is becoming increasingly apparent that to ensure financial security in retirement, individuals need to set personal goals and view planning and saving for retirement as a serious, conscious and strategic pursuit."

The 2014 Global Retirement Index is based on an analysis by Natixis Global Asset Management of 20 key trends across four broad categories: Health and healthcare quality, personal income and finances, quality of life and socio-economic factors. Together, these trends provide a dynamic measure of the life conditions and wellbeing expected by retirees and near-retirees.

The U.S. scored higher year over year in all four broad categories, yet was surpassed by other nations trending higher in areas such as healthcare and government debt. For overall retirement security, the U.S. remains behind the majority of countries in Western Europe and Canada, and ahead only of Israel on the list of the top 20 nations. Despite ranking sixth highest in per capita income, the U.S. ranks first in per capita healthcare expenditures, yet 33rd for life expectancy and relatively low (81st) for income inequality.

Global Best Practices

“There is no one-size-fits-all solution to this serious, growing retirement planning challenge,” said Hailer. “The optimal pension system for any country depends on a variety of economic, social, cultural and political factors. However, the policies and practices adopted in some regions that rate highly could hold valuable lessons for other nations, such as the U.S., which need to shore up its retirement system.”

Many of the top countries in this year’s Retirement Index have demonstrated a commitment to innovation and have emphasized simplicity in their retirement scheme’s overall design and structure. Many also have proactive governments that have shown a willingness to come together and take bold policy stances in their ongoing efforts to stabilize retirement security for their citizens.

The bottom line: Individuals, employers and government – the three legs of the retirement savings stool in every nation – each have a key role to play in improving the overall state of savings and security. Individuals need to take a more proactive, personal role in planning and saving; employers need to be more flexible and open to programs that can broaden coverage (more than half of all U.S. workers still aren’t covered by employer plans); and policymakers need to work together to institute meaningful reforms that can help drive improvement. Asset managers and financial advisors have key roles to play as well, through education and innovation.

“Investors need to think of risk first as they set personal goals and build durable, diversified portfolios,” said Hailer. “This approach can help them manage short-term volatility while they pursue long-term growth, and will help keep them invested through a variety of market cycles in order to realize their full savings potential.”

The 2014 Global Leaders

Retirees in European countries enjoy the greatest financial security in retirement, with eight of the top 10 places among the 150 nations. Countries heading the global list include top-ranked Switzerland, second-ranked Norway (last year’s no. 1), Austria, Sweden, Denmark, Germany, Finland and Luxembourg. Australia and New Zealand are the only non-European countries to break into the top 10 globally.

New Zealand, Iceland and the Republic of Korea are the most improved performers in the top tier of the rankings, with each climbing at least 10 places from last year to enter the top 20. In contrast, Japan dropped from the top 20, as did export-dependent European nations Slovenia and Slovakia. The following table highlights the top 20 countries for 2014 and shows their ranking from last year.

Natixis Global Retirement Index – Top 20 Nations for 2014
1. Switzerland (ranked 2nd in 2013)         8. Finland (6)         15. France (10)
2. Norway (1) 9. New Zealand (22) 16. Czech Republic (17)
3. Austria (5) 10. Luxembourg (3) 17. Republic of Korea (27)
4. Sweden (4) 11. Iceland (23) 18. United Kingdom (20)
5. Australia (11) 12. Belgium (14) 19. United States (19)
6. Denmark (8) 13. Netherlands (7) 20. Israel (12)
7. Germany (9) 14. Canada (13)


For a more detailed overview of the Natixis Global Retirement Index, including the rankings of all 150 nations evaluated, go to www.durableportfolios.com.

Methodology

The report was compiled by Natixis Global Asset Management with support from CoreData Research, a United Kingdom-based financial research firm.The report captured data from a variety of sources, including the World Bank and United Nations. The researchers calculated a mean score in each category and combined the category scores for a final overall ranking of the 150 nations studied. Categories measured include:

  • Health in Retirement Index (Life Expectancy at Birth Index; Health Expenditure per-Capita Index; Physicians per 1,000 People Index; Non-insured Health Expenditure Index; Hospital Beds Index);
  • Material Well-being in Retirement Index (Income per-Capita Index; Income Equality Index; Unemployment Index);
  • Finances in Retirement Index (Investment Environment Index; Old Age Dependency Index; Inflation Index; Interest Rate Index; Tax Pressure Index; Bank Non-performing Loan Index; Government Indebtedness Index; Institutional Strength Index.); and,
  • Quality of Life and Environmental Index (Happiness Index; Air Pollution Index, Water Pollution Index, Biodiversity and Habitat Index and Climate Change Index).

    About Natixis Global Asset Management, S.A.

    Natixis Global Asset Management, S.A. is one of the 15 largest asset managers in the world based on assets under management.1 Its affiliated asset management companies provide investment products that seek to enhance and protect the wealth and retirement assets of both institutional and individual investor clients. Its proprietary distribution network helps package and deliver its affiliates’ products around the world. Natixis Global Asset Management, S.A. brings together the expertise of multiple specialized investment managers based in Europe, the United States and Asia to offer a wide spectrum of equity, fixed-income and alternative investment strategies.

    Headquartered in Paris and Boston, Natixis Global Asset Management, S.A.’s assets under management totaled $867.2 billion (€629.2 billion) as of December 31, 2013.2Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.’s affiliated investment management firms and distribution and service groups include Absolute Asia Asset Management; AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Capital Growth Management; Caspian Private Equity; Darius Capital Partners; Gateway Investment Advisers; H2O Asset Management; Hansberger Global Investors; Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; McDonnell Investment Management; Natixis Asset Management; Ossiam; Reich & Tang Asset Management; Snyder Capital Management; Vaughan Nelson Investment Management; and Vega Investment Managers. Visit ngam.natixis.com for more information.

    The information contained herein is provided solely for information only and does not constitute a solicitation to buy or an offer to sell any financial products or services. This document may contain references to third party copyrights, indexes, and trademarks, each of which is the property of its respective owner. Such owner is not affiliated with Natixis Global Asset Management or any of its related or affiliated companies (collectively “NGAM”) and does not sponsor, endorse or participate in the provision of any NGAM services, funds or other financial products.

    NGAM Distribution L.P. is located at 399 Boylston Street, Boston, MA 02116.

    Natixis Global Asset Management consists of Natixis Global Asset Management, S.A., NGAM Distribution, L.P., NGAM Advisors, L.P., NGAM S.A., and NGAM S.A.’s business development units across the globe, each of which is an affiliate of Natixis Global Asset Management, S.A. The affiliated investment managers and distribution companies are each an affiliate of Natixis Global Asset Management, S.A.

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    1Natixis Global Asset Management (NGAM) is the world’s 15th-largest asset manager based on global assets under management as of December 31, 2012, according to Cerulli Associates.

    2 Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the SEC’s definition of ‘regulatory AUM’ in Form ADV, Part I.




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