Maybe the U.S. should copy what the U.K. is doing with regard toretirement plans.

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That’s according to a new brief from the National Institute on Retirement Security,which examined changes that the U.K. made to address its ownretirement crisis—a “daunting retirement shortfall” that theBritish government sought to counter by requiring all employers toautomatically enroll their employees in aretirement savings account.

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Employers are required to contribute to the retirement plan ifan employee participates, although individuals can opt out ofparticipation. In addition, the U.K. also sponsors its ownretirement plan—the National Employment Savings Trust (NEST)—sothat all employers are able to offer their employees a plan.

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Related: State Street proposes aggressive federalretirement plan

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All the changes are not yet in place, but are being phased in;the reforms are expected to be fully in place by 2018.

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During the remainder of this year and throughout 2017, U.K.employers with 30 or fewer employees will enroll their employees ina plan. The program has already expanded coverage by six millionworkers, and the total increase in coverage of nine million workersis expected when the program is fully implemented in 2017.

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“U.S. policymakers would be wise to examine the reforms the U.K.has implemented,” said Jennifer Brown, NIRS manager of research andcoauthor of the report. Brown added, “We have a deep and seriousretirement savings shortfall in the U.S., and legislative effortsthat attempted to move the needle on retirement savings andcoverage have failed.”

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Related: The future of retirement: An actuarialview

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On this side of the pond, nearly 40 million (45 percent) ofworking-age households lack a retirement account, such as a 401(k)plan or an IRA.

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That means that the typical U.S. working household has virtuallyno retirement savings. In addition, more than three out of fivenear-retirement households have less than one time their annualincome saved for retirement.

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According to the report, the typical working American householdhas minimal retirement savings—the median for allhouseholds is only $2,500—and for near-retirement households theamount is only $14,500. In addition, 62 percent of workinghouseholds between the ages of 55–64 have retirement savings thatdon’t even add up to one year’s worth of the household’s annualincome. That will never see them through retirement.

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In the U.K., the report said, “half of households have nearly nosavings or investments, with private sources of retirement incomeaccounting for 49 percent of retirement income. Including both thepublic and private sectors, 62 percent of pensioners receive anoccupational pension and 19 percent of pensioners receive apersonal pension, similar to an IRA.”

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Although in 2001, the U.K. required all employers with five ormore employees to offer pension plans to their employees, employersweren’t required to contribute to those plans, nor were employeesautomatically enrolled.

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But starting in October 2012, the U.K. launched a new retirementsavings program that will require all employers to offer retirementplans meeting minimum requirements, contribute to those plans, andautomatically enroll their employees into plans.

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All employers who choose to not sponsor their own pension planthat meets the minimum requirements concerning employer andemployee contributions are required to enroll their employees inthe government-sponsored NEST plan.

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Related: A comparison of two state-run retirementplans

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“Ten years ago, Congress clarified that employers could useautomatic enrollment features to nudge employees to save forretirement,” said Diane Oakley, NIRS executive director. Oakleycontinued, “But sadly, the rate of retirement plan coverage islower today than it was in 2006.” In fact, said the report,“pension coverage rates have not shifted and have remained around50 percent or less for decades.”

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However, she said, the U.K.’s experience with its reforms “isproof for policymakers of the power of auto-enrollment when it’sworking at full capacity.”

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