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Millions of Americans don\u2019t have enough saved for retirement \u2014 and millions more don\u2019t know where to start. With President Trump recently pointing to Australia\u2019s retirement system as a potential U.S. blueprint, this is a rare moment when reform momentum is actually building. Policymakers should seize it.<\/p>\n
Consider a young worker starting their first job today. Recent legislation means they\u2019re likely automatically enrolled in a 401(k) from day one \u2014 real progress. But fast-forward a few decades: that same worker may have cycled through six employers, accumulated a tangle of small accounts, and still face the question that haunts millions of Americans:\u00a0Will this be enough?<\/p>\n
That story is increasingly the norm.\u00a0Longer lifespans, less linear careers, a rising cost of living, and tighter government budgets are redefining what retirement security even means.\u00a0The 2019 SECURE Act and its 2022 successor made meaningful progress \u2014 but gaps in longevity protection, savings adequacy, and coverage persist.\u00a0With 401(k) and 403(b) plans now the backbone of retirement for most Americans,\u00a0the case for deeper reform is urgent.<\/p>\n
The Mercer CFA Institute Global Pension Index \u2014 which benchmarks retirement systems across 50+ markets on adequacy, sustainability, and integrity \u2014 makes the problem concrete. The U.S. scores well on integrity but consistently lags on adequacy and sustainability, exactly where reform could have the most immediate impact.<\/p>\n
The result: the U.S. sits in the middle of the global rankings while countries like Australia lead the pack. Without reform, more Americans risk reaching retirement without enough income \u2014 or the tools to access what they\u2019ve saved.<\/p>\n
Where reform is needed most<\/p>\n
1. Turn savings into income that lasts<\/p>\n
Saving is only half the challenge. The harder problem is converting a 401(k) balance into reliable income that doesn\u2019t run out. Too often, workers change jobs and cash out small accounts rather than rolling them over \u2014 permanently shrinking their retirement nest egg.<\/p>\n
With the U.S. population over 60 projected to double by 2050, longevity risk isn\u2019t abstract. Simpler rollover processes and clearer disclosures would go a long way toward helping workers preserve their savings \u2014 and plan for a retirement that could last 30 years.<\/p>\n
2. Close the coverage gaps<\/p>\n
Retirement savings in the U.S. remain deeply uneven. Younger workers, part-timers, and caregivers are the most underserved \u2014 and many have little visibility into whether they\u2019re on track.<\/p>\n
Three targeted fixes could close much of that gap: automatic reenrollment for workers who previously opted out; extending coverage to workers under 21, building on the SECURE Act\u2019s expansion for part-timers; and special catch-up contributions for caregivers who temporarily leave the workforce. Together, these changes would broaden access and reward the workers most likely to fall behind.<\/p>\n
3. Modernize investments \u2014 and reduce legal risk<\/p>\n
In 2025, the President signed an executive order directing regulators to ease restrictions on private market investments in 401(k) plans \u2014 following Australia\u2019s long-standing approach. Giving savers access to private equity, venture capital, and digital assets could improve diversification and returns. But many employers are still waiting on clear guidance around fiduciary safe harbors, liquidity, and fees before they act.<\/p>\n
Allowing 403(b) plans \u2014 which cover millions of government and nonprofit workers \u2014 to invest in collective investment trusts, as 401(k) plans already can, would lower costs and broaden access for an underserved segment of the workforce.<\/p>\n
Legal risk is also a growing deterrent. Employer-sponsored plans have faced a surge of litigation in recent years, and policymakers should explore targeted ways to deter frivolous lawsuits while keeping legitimate claims viable.<\/p>\n
Pensions still matter<\/p>\n
Most new retirement savings now flow into 401(k)s and 403(b)s, but a significant share of existing retirement wealth still sits in traditional defined benefit pensions. Modernizing the system can\u2019t mean abandoning what still works.<\/p>\n
Lowering Pension Benefit Guaranty Corporation (PBGC) premiums would encourage employers to keep sponsoring DB plans. Greater flexibility in deploying surplus DB assets could also benefit both workers and plan sponsors.<\/p>\n
Policymakers should also support DB designs that reduce financial volatility for sponsors \u2014 such as pooled employer plans, which would make it easier for smaller organizations to offer a pension at all.<\/p>\n
The bottom line<\/p>\n
Better retirement policy isn\u2019t about winning a global ranking. It\u2019s about ensuring future generations can retire with dignity \u2014 even as careers grow less linear and lifespans grow longer.<\/p>\n
The reforms outlined here \u2014 expanding lifetime income options, closing coverage gaps, modernizing investment rules, reducing legal risk, and strengthening pension protections \u2014 would make the U.S. system more resilient and more fair. The window for action is open. Policymakers shouldn\u2019t let it close.<\/p>\n
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.<\/p>\n
#retirement #system #Cplus #policymakers #opportunity #grade<\/p>\n","protected":false},"excerpt":{"rendered":"
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