This article takes a look at the 5 countries with the best retirement systems. If you prefer to check out our detailed analysis of the challenges in global retirement and how to navigate them, you may go to 20 Countries with the Best Retirement Systems.
5. Switzerland
Average Ranking: 6.5
Natixis Global Retirement Index Rank: 2nd
Mercer CFA Institute Global Pension Index Rank: 11th
The Swiss retirement income system comprises an earnings-related public scheme with a minimum pension, a mandatory occupational pension system where the contribution rates increase with age, as well as voluntary pension plans. The Mercer Index assigns a “B” rating to the system, urging initiatives to enhance factors such as the state pension age and home ownership rate. Meanwhile, the GRI index ranks the country in 2nd position, owing to its strong performance in all sub-indices (health, material well-being, finance, and quality of life). A drop in unemployment rate and inflation are the top reasons the country has fared well this year.
4. Australia
Average Ranking: 6
Natixis Global Retirement Index Rank: 7th
Mercer CFA Institute Global Pension Index Rank: 5th
Australia’s retirement system is one of the best in the world, owing to its high levels of private superannuation savings that have in turn been helping to reduce government pension spending. The retirement system is ranked B+ by Mercer, and further enhancements could lead it to achieve an even better ranking. Efforts needed include introducing a government superannuation contribution to primary carers of young children, introducing a requirement to show benefit projections on members’ annual statements, to name a few. Meanwhile, the GRI Index ranks the country in the top ten list, driven by improvements in the Finance and Health sub-indices.
3. Norway
Average Ranking: 4.5
Natixis Global Retirement Index Rank: 1st
Mercer CFA Institute Global Pension Index Rank: 8th
Norway’s retirement system is classified as a “B” by Mercer, ranking 8th with an index value of 74.4. The country’s retirement system comprises of earnings-related social security pension with a minimum pension level and mandatory occupational pension plans. Enhancing the retirement system involves strategies like bolstering household savings, reducing debt, and elevating mandatory contributions to DC plans, among other measures. At the same time, Norway ranks 1st in the Natixis GRI Index rank, taking the top spot in the Material well-being sub-index, and maintaining first position in the health sub-index as well.
2. The Netherlands
Average Ranking: 3.5
Natixis Global Retirement Index Rank: 6th
Mercer CFA Institute Global Pension Index Rank: 1st
The Mercer Index Rank has deemed the Netherlands as the country with the best retirement system as of 2023, with an index value of 85. Its retirement system is awarded an “A”, signifying a first-class and robust retirement income system. The country is supported by a strong asset base, has sound regulations, and provides good benefits to retirees. The Natixis GRI ranks the country at 6th spot, an improvement of two spots in the sub-indices of quality of life, finance, and material well-being.
1. Iceland
Average Ranking: 2.5
Natixis Global Retirement Index Rank: 3rd
Mercer CFA Institute Global Pension Index Rank: 2nd
According to Mercer, Iceland boasts a top-tier retirement income system, graded A, which not only provides substantial benefits but is also sustainable and characterized by a high level of integrity. The country has scored an overall index value of 84.8, increasing slightly from 84.7 in 2022. Similarly, Iceland has an improved position in the GRI index as well, with an overall score of 81%. The country has witnessed improvement in the Quality of Life and Material Well-Being sub-indices. Average life expectancy has also improved, thanks to the country’s healthy lifestyle and diet, as well as low pollution levels. Consequently, Icelanders have some of the longest life expectancy in Europe.
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