Where does your country rank in the global pension index?

Mercer and CFA Institute have released the 15th annual Mercer CFA Institute Global Pension Index (MCGPI). The Netherlands’ retirement income system has regained the top spot on the list, with Iceland and Denmark taking second and third places respectively. How does your country rank? Canada has a B, Australia has a B+ and the United States has a C+

The Netherlands had the highest overall index value (85.0), closely followed by Iceland (83.5) and Denmark (81.3). Argentina had the lowest index value (42.3). Although the Netherlands is currently undertaking significant pension reform, the system is well-positioned to provide excellent benefits amid the move from a collective benefit structure to a more individual-defined contribution approach.

The Index uses the weighted average of the sub-indices of adequacy, sustainability, and integrity. For each sub-index, the systems with the highest values were Portugal for adequacy (86.7), Iceland for sustainability (83.8), and Finland for integrity (90.9). The systems with the lowest values across the sub-indices were South Korea for adequacy (39.0), Austria for sustainability (22.6), and the Philippines for integrity (25.7).

 Falling birth rates have pressured several economies and pension systems over the longer term, negatively affecting the sustainability scores for countries like Italy and Spain. Several Asian systems, however, including mainland China, Korea, Singapore, and Japan, have undertaken reform to improve their scores in the last five years.

I have included only those countries with a grade of C or better.

2023 Mercer CFA Institute Global Pension Index

MCGPI benchmark table for retirement income systems around the world. This year's table compares 47 retirement income systems across the globe and covers 64 percent of the world’s population. The Netherlands’ retirement income system has regained the top spot on the list, with Iceland and Denmark taking second and third places respectively.