Global pension systems struggling to balance adequacy, sustainability
Tension between pension adequacy and sustainability is growing across the world, according to the annual Melbourne Mercer Global Pension Index.
The Netherlands and Denmark have the best global pension systems, with scores of 80.3 and 80.2, respectively, and both achieving A grades. They scored highly on adequacy and sustainability, while other European countries, such as Austria, Italy and Spain, scored B grades on adequacy and received E grades for sustainability. The scores are determined by considering 40 different indicators.
Canada holds an overall rating of 68, up from 66.8 in 2017, boosted by adequacy at 72.1 and integrity at 78.2, but pulled down somewhat by a sustainability score of 56.
“Canada’s multi-pillared approach of providing universal government programs, combined with a tax system that promotes voluntary pension and savings programs, continues to provide Canadians with a strong retirement system,” said Scott Clausen, partner in Mercer Canada’s wealth business, in a press release.
While the Canadian pension landscape remains strong, low coverage in the private sector, rising debt levels and health-care costs were highlighted by the report as major concerns for the future.
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