Iceland, the Netherlands and Denmark have retained their top three spots in the latest international ranking of national pension systems from consultancy Mercer and the CFA Institute in the 2022 study published today.

The latest annual Mercer CFA Institute Global Pension Index (MCGPI) – a study said to cover national pension systems accounting for 65% of the world’s population – also focuses on the increasing prevalence of defined contribution (DC) pension schemes and how DC pension pots are best converted into retirement products.


The top-ranking Icelandic pension system improved its overall score in the index to 84.7 this year from 84.2 in 2021. The country was included in the study – now in its 14th year – for the first time in 2021, immediately taking the top position and pushing the Netherlands and Denmark down a notch each.

This boost in Iceland’s overall score came thanks to an increase in the nation’s award for pension system adequacy of more than three points, although the scores for the other two factors which make up the overall number – sustainability and integrity – both slipped slightly from last year.

Meanwhile the Netherlands improved its overall score this year to 84.6, up from 83.5 in last year’s ranking, while Denmark was awarded 82.0 points overall – the same as in 2021.

The UK’s position in the ranking for its pension system slipped to number 10 this year from nine last year, while the German system was also pushed lower in the league table to number 17 from 14th place in 2021.

The Finnish pension system, however, jumped two places to 5th position this year from 7th place last year.

At the lower end of the scale, Austria’s pension system retained its position of 33rd place again in 2022, but its sustainability score fell to the lowest such figure in the study at just 22.7 in 2022 from 23.5 the year before.

CFA Institute president and chief executive officer Marg Franklin highlighted the challenges for pensions and the turnaround in market conditions in the last year alone.

“Since the inception of the Mercer CFA Institute Global Pension Index, the investment management and pension industry at large have faced extraordinary challenges,” she said, adding that new financial products and strategies would be required to deliver adequate returns for beneficiaries.

“This past year, we’ve gone from a ‘lower for longer’ interest-rate environment to significant rates of inflation, quadrupling of interest rates in some global markets and a rise in the cost of living for many, all of which have a significant impact on the fixed income of retirees,” Franklin said.

In the full report around the index results, Mercer and the CFA Institute focused particularly on the shift to DC pension schemes and how this increased uncertainty for retirees.

“The conversion of DC pension pots into appropriate retirement products is gradually emerging around the world, and there is no single or perfect answer,” the study’s authors wrote, saying the conversion for DC was much more complex than the provision of defined benefit (DB) pensions.

“The global pension industry and policymakers need to recognise these issues and develop a range of flexible products and policies to deliver the best possible outcomes for individuals and households who will enter their retirement years in a wide range of financial situations while also facing significant uncertainties,” they said.

In Denmark, lobby group Insurance & Pension Denmark (IPD) reacted to the country’s retention of its 3rd place ranking in the Mercer index, and the fact that the national pension system was once more one of only three countries gaining an A rating.


“It is a great ranking that we can be proud of in the industry,” said Karina Ransby, deputy director at the industry association.

“We have a pension system with solid foundations that ensures that the vast majority of Danes pay into a pension for their old age.

“But in order to future-proof our system, it is important that we continue to develop it,” she said.

Ransby said there were several recommendations from the Pension Commission that IPD hoped Danish politicians would address after the upcoming general election – for example, to safeguard savings in annuity products by allowing increased pension deductions.

“In addition, we should ensure more flexibility in our pension schemes, so that we can work towards a smoother transition to retirement,” she said.

Regarding the report’s focus on the international shift away from DB pensions towards market-rate or DC products, she said this was exactly the same development seen in Denmark, which had been a very good decision for many.

“Right now we see that there are negative returns on a number of pensions, but in the long run, pensions will be cushioned by good returns,” Ransby commented.

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