Netherlands Tops 2023 Pension Rankings
In many countries around the world, the average age of the population is rising. And while this is good news for lifespans, it also means there is a greater burden on workers to support older people who have retired.
Different countries have responded in different ways to this challenge, and a new report has ranked 47 pension systems from across the world on how they are adapting.
The Mercer CFA Institute Global Pension Index for 2023 looked at the private and public pensions available in each country or region, how sustainable those systems are, and the way the systems are managed.
The index gave each pension system a letter grade as well as a score out of 100.
This is the 15th year the report has been published — and the Netherlands came out on top, ahead of Iceland and Denmark.
Along with those top three countries, Israel was also given an "A" grade, with all four countries having scores above 80.
The report said that while the Netherlands is currently reforming its pension system, it is still "well-positioned to provide excellent benefits."
Worth $1.5 trillion, the Netherlands' private pension system is the largest in Europe. And between the country's public and private pensions, Dutch workers have been able to keep most of their income after retiring.
However, reforms agreed in May, aimed at reducing costs, will eliminate guaranteed private pension benefit levels, and change the way workers and pensioners divide up the available money.
"Inflation and rising interest rates have created a new market dynamic that poses significant challenges to pension plans," noted Margaret Franklin from the CFA Institute.
Australia, Finland and Singapore were given a "B+" on the Mercer CFA pension index, all with scores above 75.
Thailand, Turkey, India, the Philippines and Argentina were the lowest ranked countries, all being given a "D" grade, with scores below 50.
Japan, China and South Korea were given "C" grades, with scores between 50 and 60, with the report noting that these countries "have undertaken reform to improve their scores in the last five years."
