The Netherlands wins an award for the best pension system in the world

According to Mercer, the Netherlands had the best pension system in the world in 2020. Despite the significant pension reforms, the Mercer Global Pension Index qualified our pension system as first-class and robust. Our system provides good benefits now and in the future, is sustainable and has a high degree of integrity. The pension in the Netherlands consists of: a basic pension from the government, a possible supplementary pension through an employer and the possibility to save additional money yourself. However, the pension system does not allow early access to pension assets for contributors. 

Mercer compares worldwide

Each year, Mercer compares pension systems from different countries around the world. The agency points out its strengths and weaknesses. On that basis, each country receives points. At the bottom of the ranking, Thailand had the lowest index score (40.8). The highest scores by sub-index were the Netherlands for suitability (81.5), Denmark for sustainability (82.6) and Finland for integrity (93.5). The lowest scores for the sub-indexes went to Mexico for suitability (36.5), Italy for sustainability (18.8) and the Philippines for integrity (34.8).

In 2021 we dropped one ranking

In 2021, newcomer Iceland was the country with the best pension system in the world. The Netherlands relinquished its first-place position, which means that it no longer occupies the first position of the index for the first time in four years. Iceland scores better because people have fewer mortgage debts when they retire. There are also proportionally more people over 55 working. As a result, they build up pensions for longer through their work and contribute longer to Iceland’s basic pension.

Pandemic exacerbates existing problems within pension systems

According to David Knox, senior partner at Mercer, one thing is certain: tomorrow’s retirees have less and less confidence in the system. The health crisis has caused (is causing) an economic recession in most countries. This recession, therefore, leads to lower pension contributions, lower investment returns and higher government debts. And this will inevitably lead to a reduction in future pensions. Some individuals will have to work longer, while others will take a higher investment risk on their shares. Retirees will also soon have to settle for a lower standard of living.  

Higher poverty rates among women than men in old age

Globally, the average annual income of a woman is $11,500, compared to $21,500 for a man, according to the World Economic Forum. The forum estimates that it will take 257 years to close the gender gap. Take the example of Germany, where women in most occupations receive 21% less pay than their male counterparts. This pay gap contributes significantly to lower pensions. “Supporting gender equality is critical to ensuring strong, cohesive and resilient societies around the world,” says Klaus Schwab. He is the founder and executive chairman of the World Economic Forum. The Forum works with stakeholders from business and government to close the gender pay gap.

Rising gender pension gap due to corona

The corona crisis threatens to increase gender inequality around the world further. Indeed, women are more likely to bear the brunt of economic setbacks. They work in vulnerable sectors. Due to the lockdown and the coronavirus, these sectors were greatly affected. Moreover, many women have stopped working to care for both young children and elderly relatives. There is a bright spot, however. As countries slowly move out of the lockdown, women are returning to work more.


The Netherlands and Denmark have the best pension systems:


Global Pension Index 2021. Strengths and weaknesses of global pension systems in challenging times. A global ranking and analysis:

Nederlands pensioenstelsel een na beste ter wereld:

Coronavirus likely to widen gender cap in retirement:

Global economic gender pay gap equality women parity pay:

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