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10 November, 2020

Mercer CFA Institute Global Pension Index – October 2020

This index, formerly known as the Melbourne Mercer Global Pension Index, compares the pension amounts of retirement systems worldwide, highlighting some of their shortcomings, and suggesting possible areas of reform that would provide more adequate and sustainable retirement benefits.

The Global Pension Index is a joint research project sponsored by the CFA Institute, the global association of investment professionals, in collaboration with the Monash Center for Financial Studies (MCFS), and Mercer, a global leader in redefining the world of work and transforming retirement and investment outcomes.

This year, the index compares 39 pension systems worldwide, covering nearly two-thirds of the world’s population. The 2020 index includes two new systems: Belgium and Israel.

The Global Index uses the weighted average of adequacy, sustainability and integrity sub-indices (45%, 35% and 25% weighting respectively), to measure each retirement system, based on more than 50 indicators. A number of new questions related to public pension expenditure, investment in ESG (environmental, social and government aspects) and support for caregivers, were introduced this year.

The Netherlands achieved the highest overall index value (82.6) and maintains its number one position in the overall ranking, despite the significant reforms in pension matters being carried out in that country. Thailand achieved the lowest overall index value (40.8). The highest scores in each sub-index were Holland, 81.5 in adequacy; Denmark, 82.6 in sustainability and Finland, 93.5 in integrity. The lowest scores were Mexico, 36.5 in adequacy; Italy, 18.8 in sustainability and the Philippines, 34.8 in integrity.

To review the full report, please download it here.

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