A new survey conducted by Allianz has concluded that the Dutch system is the best in the world when it comes to adequacy of pension provision. 

Allianz’s ranking system measured pension provision against first, second and third-pillar criteria, as well as additional assets, care costs and the “transition from employment to pension”, while a country’s weighting towards the first pillar accounted for nearly half its total score.

After the Netherlands, Denmark came second and Norway third out of the 49 countries Allianz surveyed.

Australia was ranked 35th due to low scores for asset and home ownership, as well as the relatively small size of its first pillar.

Allianz’s new ranking comes in contrast to the Melbourne Mercer Global Pension Index, introduced in 2009.

In last year’s Melbourne Mercer, which assessed 25 pension systems, Denmark was considered to have the best pension system in the world, followed by Australia in second and the Netherlands in third.

One of the differences between Allianz and Mercer’s rankings is that latter focused on the sustainability and integrity – in terms of quality of legislation and communication – of all the pension pillars, whereas the former rated the sustainability of the first pillar separately.

Allianz’s first-pillar indicator – based on replacement rate, indexation and funding – ranked Austria first, according to Allianz, with the Netherlands coming sixth.

On the indicator for the second and third pillars – which looked at coverage, whether membership is voluntary or mandatory, employer contributions and the level of pension assets as a share of GDP – the Netherlands came in second place, after Switzerland, which has better funded pillars.

By the same measure, Denmark ranked third, ahead of Australia and the US – which, in turn, were ahead of the UK and Sweden.

Chile, Canada and Singapore rounded out the Top 10 within the second and third-pillar category. 

India and Indonesia’s pension systems fared worst out of the 49 countries surveyed due to their low levels of participation, insufficient capital funding and high care costs, Allianz found.