Overview Compare pension systems Key implications

 

What makes a world-class pension system in 2020?

 

Pension systems around the world are facing additional pressures in 2020. The widespread economic impact due to COVID-19 has had both immediate and long-term implications for retirees. Additionally, increasing life expectancies and rising pressure on public resources to support the health and welfare of older citizens will affect how citizens around the world will retire in the mid to long-term. 

“The economic recession caused by the global health crisis has led to lower pension contributions, reduced investment returns and higher government debt in most countries. Inevitably this will reduce future pensions in retirement. This will mean some individuals will need to work longer whereas others may adopt a higher level of investment risk for their savings or have to settle for a lower standard of living in retirement.” – Dr David Knox

 

Despite these challenges, pension systems are still more important than ever as households aspire to maintain their living standards throughout retirement. It’s critical that policy-makers and governments reflect on the strengths and weaknesses of their systems to ensure stronger long-term outcomes for the retirees of the future. 

 

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Comparing systems from different economic, historical and political backgrounds is an important purpose of the Index. It enables comparisons of systems with a range of design features, operating within different contexts and cultures. 

 

Compare the world’s pension systems

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  • Argentina
    Argentina
  • Australia
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  • Belgium
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  • Canada
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  • Colombia
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  • Mexico
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Results
Mercer CFA Institute Global Pension Index

Scorecard

Click an individual card to reveal the full score

Click on sub-index to compare systems

Mercer CFA Institute Global Pension Index

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    World’s most comprehensive comparison of pension systems.

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    Includes Belgium and Israel as 2020 additions.

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    Measures 39 retirement income systems against more than 50 indicators.

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    Benchmarks a country’s pension system based on 3 sub-indices: 
    AdequacySustainability and Integrity.

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    Reviews global pension systems and assesses the benefits they provide, their ongoing sustainability in the context of ageing populations and the level of transparency within their operations.

Global Grades Legend

Grade Index value Description
A >80

A first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.

B+ 75~80

A system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.

B 65~75

A system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.

C+ 60~65

A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can questioned.

C 50~60

A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can questioned.

D 35~50

A system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its efficacy and sustainability are in doubt.

E <35

A poor system that may be in the early stages of development or a non-existent system.

Mercer CFA Institute Global Pension Index

  • icon

    World’s most comprehensive comparison of pension systems.

  • icon

    Includes Belgium and Israel as 2020 additions.

  • icon

    Measures 39 retirement income systems against more than 50 indicators.

  • icon

    Benchmarks a country’s pension system based on 3 sub-indices: 
    AdequacySustainability and Integrity.

  • icon

    Reviews global pension systems and assesses the benefits they provide, their ongoing sustainability in the context of ageing populations and the level of transparency within their operations.

Global Grades Legend

Grade Index value Description
A >80

A first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.

B+ 75~80

A system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.

B 65~75

A system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.

C+ 60~65

A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can questioned.

C 50~60

A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can questioned.

D 35~50

A system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its efficacy and sustainability are in doubt.

E <35

A poor system that may be in the early stages of development or a non-existent system.


    

Mercer CFA Institute 2020 Global Pension Index

 

MCGPI coverage

Covers almost two-thirds of the world‘s population.

MCGPI measurement

Ranks 39 retirement income systems against more than 50 indicators.

MCGPI clipboard

Recommends actions for improvements in each system.

    

    

      

Key implications to pension systems in 2020

 

 

Coronavirus

COVID-19

As the world reacted to COVID-19, governments deployed a range of responses to support their citizens. There have also been diverse approaches put in place by governments, regulators, fiduciaries and individual members in effort to reduce the impact of COVID-19 to pension systems.

 

Read the full report

Gender gap

Gender gap

The gender gap in retirement benefits around the world is growing – but so is awareness of this inequity. There are many reasons contributing to this gap, including time taken out of the workforce by many women to provide care for both young children and ageing relatives.
 

 

Read the full report

Ageing population

Increasing life expectancy

With increasing life expectancies and the pressures associated with an ageing population, sustainability will be a weakness for several pension systems. The report measures the likelihood of a current system can provide benefits into the future, and highlights opportunities to strengthen long-term effectiveness.

 

Read the full report

Download the full report, report highlights or a summary of a specific pension system