GLOBAL - Dutch retirement income systems came first and Australian systems a close second in a new global pension index comparing private and public pension schemes based on adequacy, sustainability and integrity.
The first Melbourne Mercer Global Pension Index ranked the Netherlands 76.1 out of a maximum of 100, followed by Australia on 74.0, Sweden on 73.5 and Canada at 73.2. The index, produced by the Melbourne Centre for Financial Services and Mercer, compared the retirement income systems of 11 countries.
Mercer worldwide partner David Knox said he was not surprised that no country received an "A" grade of 80 out of 100 or higher, noting that in Australia, for example, the government was currently reviewing pensions arrangements in two separate government studies.
"Pension reform is still happening around the world," Knox said. "We [in Australia] have a fairly robust system, but we still have two reviews underway. Nobody thinks it's perfect ... The banking systems have been in place around the world for hundreds of years and are well developed. Pension systems are still very new and still evolving."
While the Netherlands scored highest, the report noted the Dutch score could be increased by introducing "a minimum access age so that it is clear that benefits are preserved for retirement purposes," and "providing greater protection of members' accrued benefits in the case of fraud or mismanagement," among other suggestions.
Japan rated the poorest of the 11 countries surveyed, with a score of 41.5.
"Japan has relatively low benefits," Knox said. "[Also], in terms of sustainability, Japan is gradually moving state pension age from 60 to 65. The rest of the world is moving from 65 to 67. Here we have Japan with a significantly aging population, long life expectancy and they're lagging the field in terms of moving the pension age."
This week's edition of Professional Pensions is out now.
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