Finnish pension system still one of the best in international comparison
The Finnish retirement income system ranked 4th in the international Melbourne Mercer Global Pension Index (MMGPI) comparison published today. The country’s overall ranking fell by one notch. For the sixth time in a row, Finland topped the integrity and transparency sub-indexes.
The Melbourne Mercer Global Pension Index is an annually compiled international comparison of pension schemes, now carried out for the eleventh time. The comparison included 37 countries.
The Netherlands’ pension industry was named the best in the world for a second year running. Denmark came in second and Australia third. Sweden retained its fifth position from last year.
Finland was barely outranked by Australia due to a technical change in the calculation method that favoured Australia.
“Mercer has returned to using replacement rates in their calculations. It favours pension systems that offer strong basic social security. The decline in birth rates doesn’t show in these results yet,” says director Jaakko Kiander (Finnish Centre for Pensions).
Finland #1 in integrity and transparency
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’s scores for the administrative integrity and transparency of its pension system were the highest of all countries included in the comparison for the sixth time running.
The areas of improvement listed were raising minimum pensions, increasing the prefunding of pension assets and strengthening the employment rate among older people. The right to share pension entitlements between spouses would also increase scores.
Mercerin politiikkasuositukset ovat Suomelle tuttuja ja mukana muun muassa nykyisen hallituksen ohjelmassa: pienimpiin eläkkeisiin on tulossa korotus ja ikääntyneiden työllisyysastetta pyritään parantamaan, kertoo Kiander.
“Mercer’s pension policy recommendations for Finland are familiar and included in, among other things, the current government programme: the smallest pensions will be increased and the aim is to improve the employment rate among our older population,” Kiander states.
Melbourne Mercer Global Pension Index 2019 (Mercer’s website)
MMGPI 2019 Report Highlights (PDF, EN)
Jaakko Kiander, Director, phone +358 29 411 2414, jaakko.kiander(at)etk.fi
Amended 21 Oct. 2019 at 15:48: graph added