American congressional considerations: Social security reforms and what can be learnt from abroad

Abstract

This paper will broadly discuss the social security reform experiences in Australia, Chile and the United Kingdom. All three countries have shared since the beginning of the 1980s a political and economic will to ‘grasp the thorny nettle of social security reform’. The successes and otherwise of these international social security models provide a useful ‘blueprint’ for the USA in its ongoing discussions over the future of social security reform. This paper largely concentrates on the experiences generated by Australia in moving towards a more fully funded approach to its retirement needs in the late 1980s and early 1990s. Additionally details are provided on the Chilean and British social security reform initiatives. While economic and demographic comparisons are not as strong as those with Australia, policy makers in the USA would be well served in looking at what lessons can be gained from these two models.As a former International Research Manager for the Office of Fair Trading in the UK and a regulator of retirement products in Australia, the author considers it very important to comprehend the experiences of how Australia, Chile and the UK have fostered individual retirement accounts. Certainly it can be argued that the following international experiences, combined with the realities of an increasingly ageing ‘baby boomer’ population in the USA, will help solidify the need for individual retirement accounts.