Global Pension Index 2011

The Melbourne Mercer Global Pension Index compares retirement income systems around the world and rates them based on their adequacy, sustainability and integrity. The provision of financial security in retirement is critical for both individuals and societies as most countries grapple with the social and economic effects of ageing populations. There is no perfect system that can be applied universally around the world. Indeed, even comparing the diversity of retirement income systems is certain to be controversial as every system is different and has arisen from each country’s particular economic, social, cultural, political and historical circumstances. However there are certain features and characteristics of retirement systems that are likely to lead to improved benefits, an increased likelihood of future sustainability of the system, and a greater level of confidence and trust within the community.

The Melbourne Mercer Global Pension Index objectively assesses the retirement income systems in 16 countries spread across the Americas, Europe and Asia Pacific. The countries included in this study are shown on the side bar where each country’s results are shown.

The results show that no country’s system has an index value above 80, which we consider represents an A-grade retirement income system. However, six countries have an index value between 65 and 80, which represents a B-grade system and — with some adjustments or improvements — these countries could be re-classified as A-grade systems. The following table summarises the classifications used.

Grade	Index value	Description
A	>80	A first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.
B	65–80	A system that has a sound structure, with many good features, but has some areas for improvement that differentiate it from an A-grade system.
C	50–65	A system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can be questioned.
D	35–50	A system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its efficacy and sustainability are in doubt.
E	<35	A poor system that may be in the early stages of development or a non-existent system.