Israel Still Among World's Best Pension Systems
- 15.10.2024, 14:29
The Netherlands holds the first place.
The Dutch pension system has once again been recognized as the best in the world. Iceland came in second, Denmark came in third, according to the Melbourne Mercer Global Pension Index (MMGPI). These countries are regularly among the top 3 in the rankings and this year they scored 84.8, 83.4, and 81.6 points, respectively. The pension system of Israel, which was included in the Global Pension Index in 2020, immediately taking the third place, scored 80.8 points this year and is in fourth place.
The Global Pension Index, a ranking of countries with the best pension systems compiled by the consulting company Mercer and the CFA Institute, has been published since 2009. At that time, it presented data on the pension systems of nine countries. The MMGPI-2024 study analyzed the pension systems of 48 countries, which are home to more than 65% of the world's population.
The study uses more than 50 indicators. 40% of the final score comes from indicators that assess the adequacy of the pension system (how it serves to improve the financial situation of pensioners). Among them, for example, the share of the minimum pension from the average salary, or the level of household debt in the country as a percentage of GDP.
The sustainability of the pension system (total pension assets, pension contributions, demographic indicators, public debt, GDP growth) contributes 35% to the overall indicator. Another 25% of the overall indicator comes from the “integrity of the pension system” (this includes regulation, management and operating costs of the pension system).
Also in the top ten were Singapore (78.7), Australia (76.7), Finland (75.9), Norway (75.2), Chile (74.9) and Sweden (74.3).
The bottom of the list were India, Argentina, the Philippines, Turkey, and South Africa.
The authors of the study warn that many pension systems are facing challenges, most of which are related to demographics. Longer life expectancy and declining birth rates on the one hand, and higher interest rates and health care costs on the other, are increasing the pressure on government budgets to support pension systems, and it is for this reason that the overall score of countries in the index is lower this year compared to previous years.