Switzerland has been ranked 11th in the global rankings for pension systems in 2021, scoring highly for stability, government regulation, cost and sustainability, and earning a “B mark” overall.

Iceland, the Netherlands and Denmark have the best pension systems in the world

The Mercer CFA Institute Global Pension Index measures the effectiveness of pension systems and social security systems in over 40 different countries around the world. President and CEO of the CFA Institute Margaret Franklin said that the rankings are a guide to improve the effectiveness and sustainability of each nations' pension system.

The study looked into three different categories (adequacy, sustainability and integrity) and measured how each system performed. The factors used include the size of total benefits, public spending on pensions, economic growth, insurance providers, and the security of owning a house. These are then combined into a total score.

The report found that Iceland, the Netherlands and Denmark had the best pension systems in the world. They praised these nations as having a “first-class and robust retirement income system that delivers good benefits, are sustainable and have a high level of integrity.” The pension systems used in these countries are similar to the Swiss pension system, leading to a hope that Switzerland will soon rise higher in the index.

Swiss pensions impacted by home-ownership and private insurance

Thailand found itself at the bottom of the list, with the CFA noting that the current system was not sustainable in its current form. They said pensions needed greater investment, coverage, participation and stability if the score is to improve.

Switzerland rose in the index by three points between 2020 and 2021, mainly due to increasing use of private insurance and the reduced cost of health insurance. They say the AHV system must be reformed to not include a “cash out” clause on pensions, as this increases risk and is not sustainable. The report also said that more people must live in more secure accommodation, such as being supported to buy a house, if Switzerland’s ranking is to increase.

Mercer CFA Institute Global Pension Index 2021

Overall, there were 43 nations ranked in the Mercer CFA Institute Global Pension Index in 2021, here are the top 10:

• 1. Iceland
• 2. The Netherlands
• 3. Denmark
• 4. Israel
• 5. Norway
• 6. Australia
• 7. Finland
• 8. Sweden
• 9. United Kingdom
• 10. Singapore

For the full list, you can check out the official website.