That is certainly the thinking of a lot of people who want us to be more engaged with our pensions.
For years we have looked at these two markets – with the success of the 401k market in the US and superannuation schemes in Australia – which created systems where workers are actually interested in their retirement savings.
I will bet most people in the UK do not know how to log in to their workplace pensions, let alone find out how they are performing.
The Aussie system may have some faults, but savers up and down the country know and understand what is going on in the superannuation scheme – the giant pot of cash that pays all work-based pensions.
At the other end of the scale is the 401k, essentially a defined contribution scheme, but one that workers are individually responsible for – which is very American.
The Aussie system may have some faults, but savers up and down the country know and understand what is going on
The 401k works in the same way as the UK pension – essentially of delayed taxation until retirement. So, all salary deductions are made before tax is applied.
The obvious problem with comparing to the 401k market is that the tax reliefs are limited to almost half that we have in the UK.
But talk to most professional Americans and they know what is going in and what is happening inside their 401k plan.
Maybe it is a cultural thing, stemming from the land of opportunity, where everyone can make their own way. This is the country that eschews the notion that most people want support from the government.
And that is why 401k plans become a source of household pride and why so many are engaged with what is happening in mutual funds and the stock market. Just look at the difference in reporting of finance in the US, where CNBC and Bloomberg show round the clock coverage of markets.
If we could only have a little bit of this, then our retirement planning problems would be solved.
Sadly, wealth is so often seen as something embarrassing in the UK, not a virtue.
Of course, engagement comes when you realise how much you have.
You will not meet a more engaged group of savers than those with final-salary schemes, who understand every last little detail of how their scheme works and what they are going to get.
