The Mercer CFA Institute Global Pension Index is an annual international comparison of pension systems conducted twelfth time this year. For the first time, the CFA Institute is the Main Sponsor of the Mercer Global Pension Index. The comparison has expanded year by year, this year as many as 39 countries were involved. The index consists of three components, which are the Adequacy, Sustainability and Integrity of the pension system. In the index calculation, the highest weight is given to adequacy (40%), followed by sustainability (35%) and integrity (25%).

This year, two new countries were included: Israel and Belgium. The Netherlands had the highest score in the index for the third time. Denmark came second, Israel third and Australia fourth.

The Finnish pension system ranked fifth in the comparison. Finland's ranking fell by one place as Israel rose to third place as a new country. For the seventh time, Finland was chosen as the most reliable and transparent system in the world as measured by the Integrity score. According to the report, the result for Finland could be further improved by improving the following areas: 1. raising the household savings rate and reducing indebtedness; 2. raising pension contributions; 3. improving pension security in the event of divorce; and 4. raising the employment rate, especially among the older working population. Finland's index score decreased from the result of 2019 to 73.6 to 72.9 in 2020. The decrease was mainly due to the decrease in the level of the minimum pension reported by the OECD.

Topi Piela, CEO of the Pension Fund of Finnish Broadcasting Company, commented on the results: "Mercer CFA Institute Global Pension Index report says that Finland is well above the average of Overall index Value and of all Sub-Index Values. Our system is highly valued in Integrity where we got the highest score of all countries and were able to improve it from last year’s figure. This is very good news. On the other hand, the long-term sustainability of the existing retirement income system is a concern in many societies like in Finland, particularly considering the ageing population, the increasing old age dependency ratio, the public expenditure on pensions and substantial government debt. Financial security in retirement is critical for both individuals and societies and because of these challenges, we need to take good care of our pension system also in the future over a very long period and during several generations."

Kari Vatanen, CFA, Chief Investment Officer of Veritas Pension Insurance Company, commented on the publication as follows: “The Finnish pension system is quite competitive in international comparison. This year we reached 5th place ahead of Sweden and Norway. Reaching the top positions would require additional contributions of society, e.g. an increase in the employment rate of older people, a higher level of funding in the pension system and, ultimately, higher pension contributions. Instead, the adequacy of our pension system is, by comparison, at a good Nordic level. The number one position in the integrity and transparency of the administration, which has been repeated for several years, shows that our pension system is managed very responsibly, even from an international point of view.”

About Mercer CFA Institute Global Pension Index

The Mercer CFA Institute Global Pension Index (MCGPI) report, published for the 12th time this year, compares each pension system with more than 50 indicators and covers nearly two-thirds of the world’s population. https://www.mercer.com.au/our-thinking/global-pension-index.html

About Mercer

Mercer has more than 25,000 employees in 44 countries and operates in more than 130 countries. Mercer is a business area of Marsh & McLennan Company (NYSE: MMC), the world’s leading expert services company in the areas of risk, strategy and people. It has 76,000 employees and an annual turnover of about $ 17 billion. Mercer is the world’s largest provider of outsourced asset management services, with assets under management of more than $ 300 billion and more than $ 15 trillion in assets under advisement. https://www.mercer.com/

Mercer CFA Institute Global Pension Index Release 2020

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