Australia maintains its position as the country with the most sustainable public pensions system, according to the Allianz 2016 Pension Sustainability Index.

As with the last study, published in 2014, the Nordics are the top European countries.

Denmark is runner-up, followed by Sweden, the Netherlands and Norway.

New Zealand again claims sixth place.

But the UK has fallen out of the Top 10 nations in the world, having only joined the club in the 2014 study.

It has now been replaced at tenth place by Chile, and fallen one place to eleventh.

Meanwhile, Latvia, Estonia and the US complete the list of the 10 countries with the most sustainable public systems.

The accompanying report observes that, since 2014, a substantial number of countries have improved the sustainability of their pension systems.

Brigitte Miksa, head of international pensions at Allianz Asset Management, said: “Pension reforms initiated in many countries a decade ago – raised retirement ages, reduced benefits in line with expected increased life expectancies – are now starting to bear fruit.

“Social behaviour has also changed, as people reacted to the incentives offered as a result of the reforms.”

This has been particularly notable for the Baltic countries, with Estonia entering into the Top 10 and Lithuania moving up to 16.

“The score of all three countries has been positively impacted by the fact they have continued to implement reforms to increase the effective retirement age and reduce the burden of the pension system on public finances,” the report said.

France was among the fastest climbers – up by more than five places since 2014 – along with Chile, Japan, Malaysia and Mexico.

“The improvement is due to an increase in the effective retirement age and a positive revision of the 2050 pension expenditures-to-GDP forecast,” said the report.

But Ireland, Switzerland, Italy, Croatia and Russia experienced significant declines.

Ireland has been hit by a deterioration in its demographic outlook following the UN population projection revision, which has contributed to a significant decline in the replacement rate, according to the report.

Switzerland is experiencing a worsening demographic outlook, which has had a negative impact on its sustainability score.

“Nevertheless,” the report said, “Switzerland continues to compare favourably to its peers thanks to a relatively low level of general government debt relative to GDP, a relatively high effective retirement age and a good coverage ratio.

“Moreover, pension expenditures as a share of GDP are not expected to increase dramatically in the coming decades.”

The report observed that Italy and Spain had both implemented recent reforms but that more needed to be done.

“The effective retirement age remains relatively low in both countries, while pension expenditure as a percentage of GDP remains high, and the populations are expected to age quickly,” it said.

“Encouragingly, recent reforms mean pension expenditure as a share of GDP is not expected to increase significantly over the coming decades.”

However, Miksa provided a sombre caveat even for those countries that made progress with pension reforms.

“Our study assesses the financial sustainability of public pension systems but does not examine the flipside – the adequacy of state pensions,” she said.

“Reforms of the past decade have improved the sustainability of the pension systems at the price of reducing the level and the security of benefits.”