According to the results of the global pension index table of the CFA Mercer Institute in 2024, researchers compared 48 pension income systems globally in terms of completeness, sustainability and integrity to find ideal places for retirees.
This index includes three factors including completeness, sustainability and integrity, to evaluate each pension system. This year's A-class pension systems are the Netherlands, Iceland, Denmark and Israel.
The Netherlands has maintained its title as the country with the world's leading pension system for many years. In the annual international index, experts warn that too many workers globally retire without enough guidance on how to save money.
Iceland, Denmark and Israel follow the Netherlands to enter the top 4 pension systems globally, according to this year's Global Pension Index of Mercer CFA. These are the only countries out of 48 countries assessed to receive an overall score of A.
Netherlands
The Dutch pension system includes state pensions with a fixed rate for all retirees and pensions at the workplace linked to income. The study shows that the country has reformed the pension system, shifting from a collective welfare structure to a personalized approach.
The Netherlands strictly governs the system and allows the poor to also receive a minimum pension, insurance for all employees in the private pension system.
Iceland
Iceland's pension system includes state pensions with two components: compulsory occupational pension programs require both employers and employees to contribute to the pension fund approved by the government.
The CFA Mercer Institute affirms that the long-term economic growth of a country also plays an important role because it directly affects the number of people in the workforce and the amount of savings for retirement. In addition, the debt that a country has and the amount of public money that that country pays for pensions also affect the sustainability of the pension system.
Based on these factors, Iceland has the most sustainable system in Europe.
Denmark
The pension system in Denmark ensures a general pension for all people over 65 years old and who meet all the conditions.
As of 2015, the maximum amount a person receives is around 10,081 USD. This figure will be gradually adjusted for individuals with higher incomes.
The pension fund in Denmark is not based on insurance contributions or other contributions, but is taken from the State tax source.
The second type is contributed pensions. Individuals who have worked for a long time and retired late will receive more money later. This is a mandatory pension that companies must contribute to their employees aged 16-65 and to those who work more than 9 hours/week.
Singapore
Singapore has the Central Provident Fund (CPF), a mandatory social security savings program of the Government.
Employees and employers are required to contribute monthly to the CPF fund at a rate of 35% of income (of which employees contribute 20% and employers contribute 15%). The contribution rate decreases gradually according to the age of workers, the age of 61 - 65 decreases to 13%.
The contributed amount is divided into 3 accounts: Regular accounts, used to buy real estate, insurance, financial investment and cover tuition fees; Special accounts, used to accumulate savings for old age; Medical accounts, used to pay for medical services.
According to MCGPI, Singapore's CPF system has achieved a score of B+, the best in Asia and is ranked 7th among the countries assessed.
