What Makes the U.S. Retirement System a Bad Example

The headline from the Dutch business newspaper Het Financieele Dagblad caught my eye on Twitter a few weeks ago: “America is the example of how not to do pensions.”1513720558152 The quote was from an interview with Angelien Kemna, who stepped down on Nov. 1 from the top finance job at APG Groep NV, which manages the Netherlands’ biggest (and world’s fifth-biggest) pension fund. After reading it, it struck me that it might be useful to let U.S. readers know what one of the leading figures on the global pension scene thought was wrong with the way this country handles retirement savings.1513721173221

The Dutch retirement savings system, considered one of the world’s best, is built around defined-benefit workplace pensions -- as the U.S. system used to be. But while some pension funds are affiliated with a single company, such as Royal Dutch Shell PLC or Koninklijke Philips NV, industry-wide pension arrangements are the norm. APG manages ABP, the 405 billion-euro pension fund for workers in the public sector and education, and several smaller funds.