The Netherlands has once again been named as having the best retirement system in the world, according to the Mercer Global Pension Index for 2024.  

Mercer Global Pension Index 2024

In Mercer’s ranking of the global pension packages, 48 countries are compared via three main categories, namely:

• Adequacy (i.e. what benefits are retirees receiving and how much?): benefits, system design, savings, tax support, home ownership and growth assets
• Sustainability (i.e. can the system keep delivering?): pension coverage, total assets, contributions, demography, government debt and economic growth
• Integrity (i.e. is the system regulated in a manner that instils trust?): regulation, governance, protection, communication and operating costs

The countries are then given an aggregate score out of 100 and graded based on this score. Countries scoring higher than 80 are awarded an “A” grade, with other countries scoring down to a minimum of grade E.

Study looks at how to get best retirement outcomes for pensioners

Every year, the ranking focuses on a topical issue related to pensions. In 2024, the study paid attention to how countries can best benefit pensioners as programmes are moved away from worker-friendly defined benefit (DB) schemes and towards less worker-friendly but more sustainable defined contribution plans (DC).

In short with DB pension plans, claimants know how much pension they will receive when they retire, while this is not the case with DC. “That’s why it’s critical that policies and principles are developed to ensure that retirees from these DC plans receive the best retirement outcome possible,” stated Mercer. 

Pension scheme in the Netherlands remains best in the world

After making its way back to the top spot in 2023, the Netherlands managed to maintain its number one position in the pension scheme ranking for 2024. The Dutch pension system received an “A” grade in all categories with an overall score of 84,8. 

Even though the pension system in the Netherlands is undergoing changes, “moving from a mostly collective benefit structure to a more individual defined contribution (DC) approach”, the system will still provide retirees with quality benefits that are supported by a strong asset base and solid regulation. This earns the Dutch pension scheme the highest score this year.

Close behind in the ranking, also awarded a grade A, were Iceland, Denmark and Israel. By contrast, the countries that came in last in the ranking receiving a “D” grade were South Africa, Turkey, the Philippines, Argentina and India. 

Best pension systems in the world 2024

According to Mercer, the top 10 pension systems can be found in the following countries:

1. The Netherlands (84,8)
2. Iceland (83,4)
3. Denmark (81,6)
4. Israel (80,2)
5. Singapore (78,7)
6. Australia (76,7)
7. Finland (75,9)
8. Norway (75,2)
9. Chile (74,9)
10. Sweden (74,3)

To see the rankings in full or to find out more about the methodology, visit Mercer’s website.

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