Mercer CFA Institute Global Pension Index 2024
An analysis and ranking of 48 pension systems around the world
Monash University
The Netherlands maintain top spot
The Mercer CFA Institute Global Pension Index benchmarks 48 retirement income systems around the world, highlighting challenges and opportunities within each. Vietnam was added to the mix this year. We used updated data from the OECD and other international agencies and added some new questions to the integrity sub-index.
The index is made up of three sub-indices, namely adequacy, sustainability and integrity, to measure each retirement income system against more than 50 indicators. This year’s A-grade pension systems are the Netherlands, Iceland, Denmark and Israel.
Each year we include a feature chapter that looks at a topical issue within the pension space. This year we explore how we can help defined contribution members get the best retirement outcomes. Download the report below to discover more about the analysis and your pension system.
This year’s top rated pension systems
Netherlands
Index: 84.8
Rating: A
Iceland
Index: 83.4
Rating: A
Denmark
Index: 81.6
Rating: A
Top three rated systems for each sub-index
-
Adequacy
How much do you get?
1. Netherlands
2. France
3. Uruguay -
Sustainability
Can the system keep delivering?
1. Iceland
2. Denmark
3. Israel -
Integrity
Can the system be trusted?
1. Finland
2. Norway
3. Hong Kong SAR
DC arrangements can be both flexible and confusing for retirees, and the final outcome for the individual retiree is often not as good as it should be.
Lead author, Actuary and Senior Partner, Mercer
Overall rating for each pension system
- China [56.5] ▲
- Hong Kong SAR [63.9] ▼
- India [44.0] ▼
- Indonesia [50.2] ▼
- Japan [54.9] ▼
- Korea (South) [52.2] ▲
- Malaysia [56.3] ▲
- Philippines [45.8] ▲
- Singapore [78.7] ▲
- Taiwan [53.7] ▲
- Thailand [50.0] ▲
- Vietnam [54.5]
- Austria [53.4] ▲
- Belgium [68.6]
- Croatia [67.2] ▲
- Denmark [81.6] ▲
- Finland [75.9] ▼
- France [68.0] ▲
- Germany [67.3] ▲
- Iceland [83.4] ▼
- Ireland [68.1] ▼
- Italy [55.4] ▼
- Netherlands [84.8] ▼
- Norway [75.2] ▲
- Poland [56.8] ▼
- Portugal [66.9] ▼
- Spain [63.3] ▲
- Sweden [74.3] ▲
- Switzerland [71.5] ▼
- United Kingdom [71.6] ▼
- Botswana [55.4] ▲
- Israel [80.2] ▼
- Kazakhstan [64.0] ▼
- Saudi Arabia [60.5] ▲
- South Africa [49.6] ▼
- Türkiye [48.3] ▲
- United Arab Emirates [64.8] ▲
- Argentina [45.5] ▲
- Brazil [55.8] ▲
- Chilli [74.9] ▲
- Colombia [63.0] ▲
- Mexico [68.5] ▲
- Peru [54.7] ▼
- Uruguay [68.9]
- Australia [76.7] ▼
- New Zealand [68.7] ▲
- Canada [68.4] ▼
- United States of America [60.4] ▼
Feature chapter:
Helping defined contribution members get the best retirement outcome
The transition from defined benefit (DB) to defined contribution (DC) pension plans is occurring at different speeds around the world and often takes decades to fully implement.
According to the OECD, more than 50% of pension assets were held in (occupational) DC plans or personal plans. However, normally DC members do not receive an income from their DC pension plan, which is very different from the traditional DB pension plans. That’s why it’s critical that policies and principles are developed to ensure that retirees from these DC plans receive the best retirement outcome possible.
This chapter examines what pension plans, employers, policy makers and other stakeholders can do to help ensure DC members get the best retirement outcomes. Some of the key considerations are:
- Pension plans must play a critical role in designing the best retirement products.
- A focus on the provision of a regular income during the retirement years (not just a lump sum).
- Offer flexibility in the benefits permitted, including a combination of income and some access to lump sums.
- Cognitive decline during the later years of life must be recognised.
- Build in some protection from future risks such as inflation, market declines and longevity.
- Provide guidance and advice to retirees on the best approach for them.
The ongoing shift to defined contribution pension plans introduces a host of new financial planning challenges, which are falling squarely on the shoulders of tomorrow’s retirees.
CFA, President & CEO, CFA Institute
Meet our lead author and contributors
, co-author, is Actuary and Senior Partner at Mercer.
References to Mercer shall be construed to include MMC Financial Company (Mercer) and/or its associated companies.
© 2023 MMC Financial Company. All rights reserved.
This content may not be modified, sold or otherwise provided, in whole or in part, to any other person or entity without Mercer's prior written permission.
Mercer does not provide tax or legal advice. You should contact your tax advisor, accountant and/or attorney before making any decisions with tax or legal implications.
This does not constitute an offer to purchase or sell any securities.
The findings, ratings and/or opinions expressed herein are the intellectual property of Mercer and are subject to change without notice. They are not intended to convey any guarantees as to the future performance of the investment products, asset classes or capital markets discussed.
This does not contain investment advice relating to your particular circumstances. No investment decision should be made based on this information without first obtaining appropriate professional advice and considering your circumstances. Mercer provides recommendations based on the particular client's circumstances, investment objectives and needs. As such, investment results will vary and actual results may differ materially.
Past performance is no guarantee of future results. The value of investments can go down as well as up, and you may not get back the amount you have invested. Investments denominated in a foreign currency will fluctuate with the value of the currency. Certain investments, such as securities issued by small capitalization, foreign and emerging market issuers, real property, and illiquid, leveraged or high-yield funds, carry additional risks that should be considered before choosing an investment manager or making an investment decision.
Information contained herein may have been obtained from a range of third party sources. While the information is believed to be reliable, Mercer has not sought to verify it independently. As such, Mercer makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential, or incidental damages) for any error, omission or inaccuracy in the data supplied by any third party.
For the most recent approved ratings of an investment strategy, and a fuller explanation of their meanings, contact your Mercer representative.
Mercer universes: Mercer’s universes are intended to provide collective samples of strategies that best allow for robust peer group comparisons over a chosen timeframe. Mercer does not assert that the peer groups are wholly representative of and applicable to all strategies available to investors.
Please see the following link for information on investment management index definitions.
Not all services mentioned are available in all jurisdictions. Please contact your Mercer representative for more information.
In the Kingdom of Saudi Arabia, Mercer’s Investment Services are delivered by MMC Financial Company (“MMCFC”). MMCFC is regulated by the Capital Market Authority (CMA), License No. 20-22238. MMCFC is incorporated in the Kingdom of Saudi Arabia, Commercial License No. 431210240571.
For the conflict of interest statement of Mercer Investments, of which MMCFC is a part, contact your Mercer representative or see http://f2mi.tiemles.com/conflictsofinterest.