Measuring happiness has a role to play in determining the success of retirement solutions and their outcomes, according to a new global survey by State Street Global Advisors.

The survey focused on the individual qualitative characteristics of trust, preparedness and ownership associated with certain countries’ retirement systems, exploring how happiness can be pertinent to overall perceptions and practicalities of retirement success. “The world is in emotional upheaval and the sentiment is guiding how we work, live, govern and ultimately approach the future,” noted the report.

Read: Government benefit cuts, longevity among global trends affecting retirement readiness

It highlighted some fairly basic differences between how robust the defined contribution pension plan options are across different countries, including Australia, Britain, Germany, Ireland, Italy, the Netherlands, Sweden and the United States. In Australia, the Netherlands and Sweden, for example, plans are made available to the entire working population, whereas in Ireland and the U.S., coverage ratios are much lower. Italy also has quite low coverage, but this is likely because it introduced voluntary private retirement savings relatively recently, as Italians have traditionally relied on generous state pensions, according to the report.

As well, levels of optimism about retirement varied widely by country. Americans (27 per cent) were the most optimistic about their financial situation at retirement, while Italians (five per cent) were the least. The results were less dismal when retirees were asked whether they were happy in retirement. More than half (58 per cent) of Americans said yes, along with 38 per cent each of Australians and Britons, but again dropped down to five per cent for Italians.

Read: Global pension systems struggling to balance adequacy, sustainability: report

Overall, the U.S. boasted the highest overall happiness score at 4.1. While the U.S. respondents all had access to a DC plan, this is by no means true for all Americans, the survey pointed out. For those who do have access, there’s a strong sense of ownership and high aggregate assets. A sense of ownership emerged as a key factor in creating the happiness score. “Beyond believing that the system works, workers must understand and embrace their role within it to truly gain the value that savings structures have to offer,” the report said.

Australia and Sweden, which each scored 3.9, have stable, established pension systems. The report highlighted that Australians have a high feeling of ownership, while Swedes benefit from a mixture of private and public benefits.

On the other hand, Italy scored 2.2, the second lowest score, with the survey noting the country has introduced reforms to make its pension system sustainable, but low assets and trust in the system keep Italians from feeling too confident about retirement. In the Netherlands, the low sense of ownership stemming from recent reforms pushed its score down to 2.1. However, the survey noted that once the reforms are more established, the Netherlands should be more aligned with Sweden.

Read: How Ontario’s pension regulation changes will impact DC plans

Copyright © 2020 Transcontinental Media G.P. Originally published on

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