The Finnish retirement income system ranked 5th in the international Melbourne Mercer Global Pension Index (MMGPI) comparison published today. For the fourth time in a row, Finland topped the integrity and transparency sub-indexes, but the country’s overall ranking fell by one notch.
The Melbourne Mercer Global Pension Index is an annually compiled international comparison of pension schemes, now carried out for the ninth time. The comparison included 30 countries.
The Danish retirement income system ranked #1 for the sixth time in a row. The system in the Netherlands scored almost as many points, while the pension system in Australia ranked 3rd.
Outranked by newcomer Norway
Finland’s overall ranking fell by one notch, from 4th to 5th. Norway, a newcomer in the comparison, outranked Finland. Sweden ranked 6th, but the differences between the three Nordic countries are small.
In the 2016 comparison, the Finnish pension reform improved the sustainability of the country’s pension system. This year, the weak economic outlook, the rising public debt and the Finn’s poor interest in saving for retirement reduced the points for Finland.
“The Global Pension Index is an interesting comparison since it takes account of the adequacy, the sustainability and the integrity of pension systems. The Nordic countries do well since they score high points in all areas,” explains Mikko Kautto, director at the Finnish Centre for Pensions.
Finland #1 in integrity and transparency
Finland was among the top ten in all categories. For the fourth time in a row, Finland ranked #1 in the sub-indexes of integrity and transparency.
The suggested targets of improvement are the same as before: raising minimum pensions, improving the employment rates of the elderly and increasing the funding of pension assets. A better distribution of pension rights between spouses would also raise Finland’s overall score.
“It is difficult to improve our score. Since the state is in debt, it’s not easy to raise the minimum pension levels to a significant degree. It is also not realistic to increase funding in a situation where we want to keep the pension contribution levels stable,” says Kautto.