The crisis related to retirement funding in the United States persists in spite of the country being the one of the wealthiest in the world, and solving the ongoing problem will require more than simply piecemeal alterations to policy that create incremental changes. This is the idea posited by Bloomberg’s editorial board in a new piece published by the news organization.

“Addressing this impending crisis will require a lot more ambition than Congress has yet demonstrated,” the board writes. “The U.S. has never squarely considered how best to encourage people to supplement their expected Social Security payments and set aside enough for old age. For much of the 20th century, the government left the issue mostly to employers, which offered pension benefits to long-serving workers.”

Many Americans today look to such defined-benefit plans as an ideal form of retirement security, but the history of such plans does not really conform to the reality, since only about two-fifths of workers were covered by such plans, the piece says.

“Even for those lucky enough to be covered, relying on employers to ensure income in old age was never a great idea,” the piece goes on to say. “People tend to live longer than businesses, and many employers are poorly equipped to manage pension finances. Since 1974, more than 140,000 companies have ended their defined-benefit plans. Thousands more have transferred distressed plans to the Pension Benefit Guaranty Corporation, a government insurer that could yet cost taxpayers dearly.”

Current benefit plans such as 401K options arose similarly by accident, but the way such plans are written could expose risk to employees who decide how much and how often to put money aside, the piece reads.

“Legislators keep trying to address the flaws with tweaks, such as the SECURE Act, adopted in 2019, and a sequel now under consideration,” the editors say. “Among other things, the initiatives seek to enroll more people automatically, cover part-time employees, nudge more small businesses to offer 401K plans, and encourage the inclusion of annuities designed to help retirees make their money last. Such reforms are a mixed bag.”

Automatic enrollment could help people save, but might be undermined if fees remain high, the piece explains. The process remains complicated and is not creating the desired outcomes, the piece says.

“The U.S. needs a simpler and more comprehensive approach,” the piece reads. “The essential components: universal coverage, automatic enrollment in low-cost plans, a limited menu of well-curated investments, easy portability when workers change jobs, and subsidies for the low-paid. Such a system would reduce unnecessary risks, minimize fees, maximize returns, slash red tape, and benefit businesses and the broader economy — while ensuring many more Americans can retire comfortably.”

Read the column at Bloomberg.