Tuesday, October 25, 2016
The Nordics Have The Best Pension Systems
Via Business Insider: The Danish pension system ranks the highest in the world, according to a report published by Mercer Global. Finland comes in fourth place and Sweden in fifth. The Mercer pension index is based on three parameters; adequacy, sustainability and integrity of the government in question. 27 countries were included in 2016’s study. Denmark, and runner-up Netherlands both have pension systems described as, “A first class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity”. Meanwhile the Finnish and Swedish pension systems had the following description: “A system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system”. All of the three Nordic countries included in the report have declined in comparison to last year's index values. Sweden saw the largest decrease, which is explained by a reduction in the level of household savings and the assumed level of funded mandatory contributions. Sweden could, by increasing the pension age to reflect the increasing life expectancy, improve its position in the index, according to the study. In Denmark and Finland life expectancy is also rising, and their index values could be improved by increasing the labor force participation rate at old ages. Norway's pension system was not included in the report, but on the other hand Norway has been proclaimed the best place in the world to retire.