Key Takeaways
- • The Netherlands ranked first in the 2025 Mercer CFA Institute Global Pension Index with an overall score of 85.4, ahead of Iceland (84.0) and Denmark (82.3), with Israel rounding out the A-grade group.
- • Singapore earned an A grade for the first time in the index's 17-year history, the only Asian system to reach that level, and ranked fifth overall.
- • The U.S. ranked 30th of 52 countries with a score of 61.1, a one-rank drop from the prior year despite a 0.7-point score increase.
- • Mercer proposed eight principles for balancing participant interests with national policy goals, warning that government mandates and restrictions can distort pension investment.
- • Eight systems improved their grade this year, none were downgraded, and the index attributes overall score gains to longer lifespans and declining birth rates.
Summary
The retirement systems of the Netherlands, Iceland, Denmark and Israel were again named the top four pension systems worldwide in the 2025 Mercer CFA Institute Global Pension Index, the same four that topped the 2024 report. The Netherlands recorded the highest overall score at 85.4. Iceland, ranked second, scored 84.0 and posted the highest sustainability score at 85.7, while Denmark scored 82.3. Singapore received an A grade for the first time in the index's 17-year history, making it the only Asian system at that level and the fifth-ranked system overall.
The index benchmarks 52 countries, representing about 65% of the world's population, and scores each system on adequacy (40% weight), sustainability (35%) and integrity (25%). Kuwait posted the highest adequacy score at 86.6 and Finland the highest integrity score at 90.6. A-grade systems are described as offering a robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity. Eight systems improved their grades this year and none were downgraded. According to the report, the overall score improvement stems from people living longer and continued declines in birth rates.
The U.S. ranked 30th with a total score of 61.1, including an adequacy score of 64.1, sustainability of 59.9 and integrity of 58.0. It sits in the C+ tier alongside the UAE, Spain, Colombia, Oman and Malaysia. Turkey, the Philippines, Argentina and India received D grades.
Mercer's report highlights heightened geopolitical and economic uncertainty reshaping retirement systems and notes that governments influence, and in some cases restrict, private pension fund investments. Mercer proposed eight principles to balance participant interests with broader national interests, including retirement-first purpose, fiduciary integrity, robust governance, full market access, policy incentives rather than mandates, collaborative scale, transparency without performance tests or fee caps, and macro awareness where fund assets are a significant share of GDP.
CFA Institute President and CEO Margaret Franklin said that regulations and government actions, from tax policies to investment mandates, profoundly shape how pension funds allocate capital. She added that the professional investment community must guard against unintended consequences when mandates or restrictions distort the system.
The index benchmarks 52 countries, representing about 65% of the world's population, and scores each system on adequacy (40% weight), sustainability (35%) and integrity (25%). Kuwait posted the highest adequacy score at 86.6 and Finland the highest integrity score at 90.6. A-grade systems are described as offering a robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity. Eight systems improved their grades this year and none were downgraded. According to the report, the overall score improvement stems from people living longer and continued declines in birth rates.
The U.S. ranked 30th with a total score of 61.1, including an adequacy score of 64.1, sustainability of 59.9 and integrity of 58.0. It sits in the C+ tier alongside the UAE, Spain, Colombia, Oman and Malaysia. Turkey, the Philippines, Argentina and India received D grades.
Mercer's report highlights heightened geopolitical and economic uncertainty reshaping retirement systems and notes that governments influence, and in some cases restrict, private pension fund investments. Mercer proposed eight principles to balance participant interests with broader national interests, including retirement-first purpose, fiduciary integrity, robust governance, full market access, policy incentives rather than mandates, collaborative scale, transparency without performance tests or fee caps, and macro awareness where fund assets are a significant share of GDP.
CFA Institute President and CEO Margaret Franklin said that regulations and government actions, from tax policies to investment mandates, profoundly shape how pension funds allocate capital. She added that the professional investment community must guard against unintended consequences when mandates or restrictions distort the system.
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