Dutch pension system ranked best in world

The Netherlands has the world’s best pension system, according to a Mercer report ranking retirement systems in 14 nations with major pension systems.

The Melbourne Mercer Global Pension index ranked retirement systems on adequacy, sustainability and integrity in 14 countries, including Germany, the UK, Japan, China and, for the first time, Switzerland.

The Netherlands, last year’s winner, achieved an overall score of 78.3% and by far the highest integrity score of 91.4%.

The system in the Netherlands, which the report called “sound,” scored top marks in adequacy, which considers factors such as the minimum pension level and how much an average earner would receive as a percentage of his salary upon retirement. The Dutch system also was first in integrity, which considers how much regulatory protection is available to an average pension fund participant.

While all nations suffered from the financial crisis, the U.S., U.K. and Canada generally suffered more because their pension systems had a relative higher dependency on equity performance. Canada, which scored 69.9, ranked fifth followed by the U.K. with a score of 63.7.

The Melbourne Mercer Global Pension Index is produced by Mercer for the Australian Centre for Financial Studies, a non-profit research consortium of several academic institutions. The index is based on a total of about 40 indicators that measure adequacy, sustainability and integrity.

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