Mercer CFA Institute Global Pension Index 2024 

The Mercer CFA Institute Global Pension Index benchmarks 48 retirement income systems around the world, highlighting challenges and opportunities within each. Vietnam was added to the mix this year. We used updated data from the OECD and other international agencies and added some new questions to the integrity sub-index.

The index is made up of three sub-indices, namely adequacy, sustainability and integrity, to measure each retirement income system against more than 50 indicators. This year’s A-grade pension systems are the Netherlands, Iceland, Denmark and Israel.

Each year we include a feature chapter that looks at a topical issue within the pension space. This year we explore how we can help defined contribution members get the best retirement outcomes. Download the report below to discover more about the analysis and your pension system.

The transition from defined benefit (DB) to defined contribution (DC) pension plans is occurring at different speeds around the world and often takes decades to fully implement. 

According to the OECD, more than 50% of pension assets were held in (occupational) DC plans or personal plans. However, normally DC members do not receive an income from their DC pension plan, which is very different from the traditional DB pension plans. That’s why it’s critical that policies and principles are developed to ensure that retirees from these DC plans receive the best retirement outcome possible.

This chapter examines what pension plans, employers, policy makers and other stakeholders can do to help ensure DC members get the best retirement outcomes. Some of the key considerations are: 

• Pension plans must play a critical role in designing the best retirement products.
  
  
• A focus on the provision of a regular income during the retirement years (not just a lump sum).
  
  
• Offer flexibility in the benefits permitted, including a combination of income and some access to lump sums.
  
  
• Cognitive decline during the later years of life must be recognised.
  
  
• Build in some protection from future risks such as inflation, market declines and longevity.
  
  
• Provide guidance and advice to retirees on the best approach for them.