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5 Countries With the Best Retirement Systems, According To Experts

To find the five countries with the best retirement systems and how they qualify as such, GOBankingRates looked at data published by the 2021 Mercer CFA Institute Global Pension Index. The Index compares 43 different retirement income systems across the globe in reference to adequacy, sustainability and integrity.

These three sub-indices, which make up the overall index value for each country’s retirement system, are weighted to reflect their overall importance. Here’s a breakdown of each one.

  • Adequacy 40%: Overall, this sub-index represents the benefits provided and the retirement system design of each country. Although there are many indicators that comprise the Adequacy sub-index score for each country, the minimum pension level and the net replacement rate (individual net pension entitlement divided by net pre-retirement earnings) for a range of incomes are the most important.

  • Sustainability 35%: Overall, this sub-index measures indicators that reveal whether a current country’s retirement system will be able to provide benefits in the future. Although several factors make up the Sustainability sub-index, the level of coverage of private pension plans, the projected demographic factors and the level of pension assets as a proportion of GDP are the most important.

  • Integrity 25%: Overall, this sub-index includes many of the legal requirements involved in the governing and operation of each country’s retirement system. The integrity sub-index considers the integrity of the overall pension system but focuses on private sector pensions.

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