New global pension index ranks schemes available in Ireland highly
The inaugural Melbourne Mercer Global Pension Index compares the pension systems of 11 countries, across five continents.
It is the first time the world’s retirement pension plans have been compared and ranked in a way that considers a retirement income system in its entirety, it said.
Though not one of the 11 countries initially included, Mercer has estimated a rating for Irish pensions based on the principles used in the initial survey.
The Irish system achieved an overall index value of 71, placing it in the B grade, a ranking achieved by only four other countries. Aisling Kennedy, senior consultant in Mercer said the score reflected the quality of pensions available here.
The Netherlands obtained the top ranking in the Index with a score of 76.1 out of a maximum of 100 followed by Australia (74), Sweden (73.5) and Canada (73.2).
Britain was well down in the rankings with a score of 63.9 and the USA 59.8.
No country had an A-grade system which required 80 or more.
Mercer said that even the best pension models still need refinement to ensure that they are robust enough to support the world’s rapidly ageing population.
The overall index is based on results from more than 40 indicators of features that are desirable in all retirement income systems. These characteristics were grouped into adequacy, sustainability and integrity.
Ireland did “strongly” in the areas of integrity and adequacy sub-indices, with particular strengths in member communication, prudential regulation and the level of the state pension.
The report found question marks hang over the sustainability of the system, suggesting change is needed to guarantee the Irish pension system continues to deliver in the long term.
With an ageing population putting increasing strain on stretched Government resources, the sustainability of our pension system is a key concern, said Kennedy.
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