The Finnish pension system came fourth in the international Melbourne Mercer Global Pension Index comparison published today. The Finnish pension system was included in this comparison for the first time. Finland did particularly well in the sub-index of integrity, in which the overall governance of the system and its transparency were assessed.
The Melbourne Mercer Global Pension Index is an annually compiled international comparison of pension systems, now carried out for the sixth time. This year, the comparison comprised 25 countries, including Finland for the first time.
The comparison ranks the Danish pension system as the best in the world and as the only so-called A-grade system. Finland is among the top of the following grade, immediately following Australia and the Netherlands, together with Switzerland, Sweden and Canada.
The pension systems of various countries have been assessed in terms of pension adequacy, system sustainability and system integrity.
Countries which develop their pension systems do well
The comparison shows which factors should be developed to improve the countries’ index value. As for Finland, the factors include raising the minimum pension, increasing pension funding, increasing the employment rate among the elderly and introducing the right to share pension entitlements between spouses. The latter has already been implemented in many countries in order to improve the security of both parties in a divorce. In Finland, pension entitlement is individual.
Finland was assessed based on the currently valid pension legislation. According to Director Mikko Kautto, Finnish Centre for Pensions, the good ranking does not exclude a reform of the system.
“The countries at the top of the comparison are there because they continuously develop their pension systems,” states Kautto.
He believes that the forthcoming pension reform may even improve Finland’s position in the subsequent comparisons.
An international evaluation of Finland’s pension system was carried out in 2013 when Professor Nicholas Barr and Professor Keith Ambachtsheer evaluated Finland’s earnings-related pension system.
Mikko Kautto, Director, Finnish Centre for Pensions, tel. +358 29 411 2185, mikko.kautto(at)etk.fi