The Netherlands Had the Best Pension System in the World in 2020

Many people aspire to a retirement with various beneficial and sustainable advantages. However, this is only possible in countries with a good pension system.

Mercer CFA Institute released a report titled the Global Pension Index 2020, ranking countries with the best pension systems in the world. This index measures pension systems in 39 countries based on three sub-indices: sustainability, adequacy, and integrity.

The following is a list of the ten countries with the best pension systems in the world according to the Global Pension Index 2020:

1. Netherlands

With an index score of 82.6 points, the Netherlands is confirmed as the country with the best pension system in the world with a grade of A in 2020. Most workers in the Netherlands are enrolled in a defined benefit industry pension scheme, with a benefit size equal to lifetime average earnings.

2. Denmark

Denmark is in second place with an index score of 81.4 points and a grade of A. Danish pension income consists of a public basic pension scheme, supplementary tested pension benefits, fully funded defined contribution schemes, and mandatory occupational schemes.

3. Israel

Israel is ranked third with an index score of 74.7 points and a grade of B. The pension system in Israel originates from the state, which is universal, and from the private sector with mandatory contributions from employees and employers.

4. Australia

Australia is ranked fourth with a score of 74.2 points and a grade of B. Australia has three pension schemes: a public pension scheme, an occupational pension scheme, and a personal pension scheme.

5. Finland

Finland is ranked fifth with a score of 72.9 points and a grade of B. The pension scheme in Finland consists of earnings-related pensions from employment or business activities and national pensions (for pensioners with very low incomes).

6. Norway

Norway has the sixth-best pension system in the world with a score of 71.2 points and a grade of B. In Norway, the pension system is divided into a national insurance scheme, an occupational pension scheme or contractual early retirement from the employer, and private pension savings.

7. Singapore

Singapore has a score of 71.2 points and a grade of B. The pension system in Singapore is one of the oldest and most developed pension schemes in Asia. This system relies on the Central Provident Fund, which provides most social security functions.

8. Sweden

Sweden is ranked eighth with an index score of 71.2 points and a grade of B. The pension system in Sweden consists of three schemes: a national public pension from the state, an occupational pension from the employer, and from personal savings.

9. Canada

Canada has a score of 69.3 points and a grade of B. Canada mandates all workers aged 18 and over to set aside a portion of their income into a government-managed pension program.

10. New Zealand

New Zealand is ranked tenth with a score of 68.3 points and a grade of B. The pension system in New Zealand consists of a public pension scheme, a limited early retirement scheme, an occupational pension scheme, the KiwiSaver scheme (work-based voluntary savings), and private sector worker schemes.