A well-structured pension system is essential for ensuring financial security in retirement. But which countries provide the best pensions? Using data from the 2024 Mercer CFA Global Pension Index and OECD reports, we ranked the top 20 pension systems based on public expenditure, retirement age, contribution rates, and workforce participation. Explore how different countries structure their pension systems for sustainability and security.
Top 20 Countries for Pensions in 2024
The following table provides a ranking of the world’s top pension systems, factoring in government spending, retirement age policies, and participation rates.
| Rank | Country | Overall Index Score | Rating | Average Retirement Age | Pension Contribution Rate (% of Average Wage) |
|---|---|---|---|---|---|
| 1 | Netherlands | 84.8 | A | 66 | 27.65% |
| 2 | Iceland | 83.4 | A | 67 | 12.0% |
| 3 | Denmark | 81.6 | A | 74 | 12.0% |
| 4 | Israel | 80.2 | A | 67 | 17.5% |
| 5 | Finland | 75.9 | B+ | 65 | 24.4% |
| 6 | Sweden | 74.3 | B+ | 65 | 18.5% |
| 7 | Norway | 75.2 | B+ | 67 | 18.1% |
| 8 | Australia | 76.7 | B+ | 67 | 9.5% |
| 9 | Canada | 77.3 | B+ | 65 | 9.9% |
| 10 | Singapore | 79.5 | B+ | 62 | 37.0% |
| 11 | Switzerland | 71.5 | B | 65 | 12.0% |
| 12 | Ireland | 68.1 | B | 66 | 14.0% |
| 13 | Germany | 67.3 | B | 65 | 18.7% |
| 14 | United Kingdom | 71.6 | B | 66 | 8.0% |
| 15 | Belgium | 68.6 | B | 65 | 16.36% |
| 16 | New Zealand | 68.7 | B | 65 | 3.0% |
| 17 | Chile | 74.9 | B+ | 65 | 10.0% |
| 18 | France | 68.0 | B | 62 | 27.5% |
| 19 | Uruguay | 68.9 | B | 60 | 15.0% |
| 20 | Mexico | 68.5 | B | 65 | 6.275% |
Source: 2024 Mercer CFA Institute Global Pension Index
What Makes a Good Pension System?
The best pension systems share several key characteristics:
- Adequacy – Ensuring retirees receive a livable pension that maintains quality of life.
- Sustainability – A strong balance between contribution rates and public expenditure.
- Integrity – Clear governance, transparency, and well-regulated pension funds.
- Participation Rates – Encouraging widespread pension contributions among the working population.
Factors Affecting Pension Systems
Several factors impact how pension systems rank globally:
- Government Spending – Countries with higher public expenditure on pensions tend to provide more comprehensive retirement benefits.
- Retirement Age – Longer working lives increase financial sustainability but can impact quality of life.
- Mandatory Contributions – Countries with higher employer and employee contributions often provide better retirement security.
- Workforce Participation – A higher percentage of workers contributing ensures financial sustainability.
FAQs About Global Pensions
Which Country Has the Best Pension System?
As of 2024, the Netherlands ranks as the world’s best pension system, scoring highly in adequacy, sustainability, and integrity.
What is the Retirement Age in Europe?
Most European countries have a retirement age between 65 and 67, with some, like Denmark, gradually increasing the age limit.
How Much of My Salary Should Go to Pensions?
This varies by country. In Italy, 33% of wages are contributed to pensions, while in Australia, it’s just 9.5%.
Which Countries Have the Most Sustainable Pension Systems?
Iceland, Denmark, and the Netherlands have the most financially sustainable pension systems due to well-balanced contribution rates and participation.
What Are the Best Private Pension Schemes?
Many countries encourage private pensions to supplement state pensions. Many countries encourage private pensions, such as Australia’s Superannuation, the UK’s Workplace Pensions, and the US’s 401(k).
Plan for Your Financial Future
Understanding the strengths and weaknesses of pension systems worldwide can help individuals plan for retirement wisely. Whether you’re relocating, investing in a private pension, or evaluating your country’s retirement options, Blacktower Financial Management is here to guide you.For personalised advice on wealth management and pension planning, contact our team today.