Finland breaks into top three world’s best pension systems

The Finnish pension system is the third best in the world, according to the Mercer Global Pension Index out today. This is the first time Finland has been ranked among the world’s top three pension systems, and the fifth time that the Finnish system’s integrity rating is the highest in the world.

The Melbourne Mercer Global Pension Index is an annual study that compares national pension systems. Compiled for the tenth time in 2018, the study has expanded year on year and now comprised 34 countries.

The best pension system in the world in 2018 is the Netherlands, which ousted Denmark from its long-standing top spot. In practice there is hardly anything to separate these countries with an A grade rating: the score differences are marginal.

Sweden climbs to fifth place

This is the first time Finland ranks among the world’s top three pension systems. Finland’s ranking improved two notches from 2017 as it overtook both Australia and Norway. Sweden likewise overtook Norway to climb to fifth place.

Finland’s promotion to third spot is explained both by its own improved scores and by Australia’s and Norway’s declining scores. We benefited from changes made to the method of scoring pension replacement rates. Changes in household gross debt-to-income ratios also contributed to improve Finland’s relative position.

“We’re lagging behind the two leading countries in terms of our sustainability outlook. Denmark and the Netherlands have much larger pension assets than we do. Furthermore, the prefunding of pensions is much more extensive than in Finland, says Director Mikko Kautto from the Finnish Centre for Pensions.

Finland has highest integrity rating

The Mercer index ranks countries’ pension systems using criteria relating to the adequacy of pensions, the sustainability of the pension system and administrative integrity.

Finland was ranked among the top ten countries in all three categories. Finland’s scores for the administrative integrity and transparency of its pension system were the highest of all countries included in the comparison for the fifth time running.

The areas of improvement listed were raising minimum pensions, strengthening the employment rate among older people, and increasing the prefunding of pension assets. The right to share pension entitlements between spouses would also increase scores.

“Minimum pensions have been falling in recent years following index cuts. And even though the employment rate for the over 60s has been rising, there is still room for improvement in this area too,” Mr Kautto adds.

Melbourne Mercer Global Pension Index 

Summary of Mercer Index results   (PDF)

Further information:
Mikko Kautto, Director, tel. +358 29 411 2185, mikko.kautto(at)