“Policy makers must do everything possible to ensure retirement plans are supported, up-to-date and well-regulated,” said David Knox, a senior partner at consultancy Mercer and lead author of the Mercer CFA Institute Global Pension Index. 2022.
According to the study, which covers 44 countries with 65% of the world’s population, Iceland has the best pension system in the world, followed by the Netherlands and Denmark. At the opposite extreme are Argentina, the Philippines and Thailand.
How are pension systems evaluated?
The index is based on three sub-indices: benefit adequacy, sustainability and integrity.
In the first sub-index, the adequacy of the benefits, is the basis of the study and evaluates the tax benefits received by voluntary retirement savings, the minimum age to receive the fruits of private pension plans, their potability, the design of retirement benefits, the effects of a separation or divorce on the retirement received, and the effect that periods of unemployment—such as paternity leave or disability—will have on the benefit received after retirement.
The second sub-index assesses the long-term sustainability of retirement income. This issue —the key behind the French reform— is of great concern to several countries, especially those where the population is aging at an accelerated rate.
Due to the key role that the provision of a public pension plays in most systems, the level of public debt and public spending on pensions represent important factors that affect the long-term sustainability of a system and the future level of these pensions. .
The World Bank suggests raising the retirement age as life expectancy increases.
“There are people who refuse to work even two more years despite this two-decade increase in life expectancy,” said World Bank chief economist Indermit Gill.