The government's own forecasts, which take likely interruptions into account by assuming continuous saving from age 30, suggest that the new accounts will give median earners a pension worth around 45% of their pay before retirement.

ECONOMIST: Pension prospects

The states have promised big pension and retirement benefits to their employees without putting aside money to pay for them.

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With a defined benefit plan, the employer put money aside for you in a safe place and, based on your pay and years of service, you were entitled to a pension upon retirement.

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That will ruin the pay-as-you-go state pension schemes that provide the bulk of retirement income in rich countries.

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It's clear workers are going to have to save more, stay on the job longer and pay more attention to the investment of their own pension funds if they want a comfortable retirement.

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Spending on pensioners, which takes up 40% of the social-security budget, is likely to go up, not down: the government has promised to keep the basic pension, pay more to poorer pensioners, and encourage more people to save for retirement.

ECONOMIST: Public spending

Whether or not people can expect a comfortable retirement depends on the replacement ratio the proportion of their lifetime average earnings that their pension will pay out.

ECONOMIST: Falling short

After all, they may have to compete for jobs with a new generation of educated workers from rising economies like China and India, save for a retirement without a traditional pension and lower Social Security and Medicare benefits, and face higher tax rates to pay our growing national debt.

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