Features of Pension Systems and Pension Funds in Selected Countries
|United Kingdom||United States||Canada|
|Retirement age (men/women)||65/60||65/65||65/65|
|Coverage||All residents||All workers||All residents|
|Replacement ratio||Flat pension||0.40||0.35|
|Financing||Funded (private) PAYG (SERPS)1||Funded||Funded|
|Indexation after retirement||Discretionary, but common.||Discretionary, but common.||Not common.|
|Predominant type||DB2 (SERPS and occupational), DC (Private Pensions).||DB (occupational), DC (IRA).||DB|
|Regulation of portfolios||Prudent man concept; 5% self-investment limit; concentration limit for DC schemes.||Prudent man concept; 10% self-investment limit for DB plans.||Prudent man concept; 7% limit on real estate, tax on foreign investment above 10%.|
|Funding||Obligatory only for contracted-out part.||Higher insurance premia if underfunded (ABO).4||Obligatory|
|Vesting||Two years. Indexation of accumulated benefits.||Five years. No indexation of accumulated benefits.||Two years. Little indexation of accumulated benefits.|
|Retirement age (men/women)||65/65||65/65||65/62|
|Coverage||All residents||All workers||All workers|
|Indexation after retirement||Almost universal.||Mandatory||Almost universal.|
|Predominant type||DB||DB||DC (60%), DB (40%)|
|Regulation of portfolios||Prudent man concept; 5% self-investment limit; 5% foreign investment for public pensions.||Majority to be in listed bonds and loans to contributors.||30% limit on domestic shares, 50% domestic real estate, 20% foreign currency assets, 10% foreign shares.|
|Funding||Obligatory for IBO7 or PBO.8||IBO, with contributions adjusted every 5 years.||Obligatory for IBO or PBO.|
|Vesting||One year. Indexation of accrued benefits.||Immediate, national scheme.||Graded vesting between five and 30 years.|
State earnings-related pension scheme.
Accumulated benefit obligations.
Taxed at lower rate.
Deductible up to a ceiling.
Indexed benefit obligations.
Projected benefit obligations.