For the second year in a row, the Netherlands has the best pension system in the world, writes consultancy firm Mercer in the agency's Global Pension Index. The Netherlands ends in Denmark, which is in second place just like last year, Australia is in third place.
In Mercer's Global Pension Index, the pension systems of more than thirty countries worldwide are tested for adequacy, future-proofing and integrity. Based on this, a country receives a certain number of points.
The Netherlands scores 81 points according to this calculation method, compared to 80.3 last year. Our pension system scores particularly well on adequacy, future-proofing and integrity, according to Mercer. Our system is also in better shape due to economic growth and rising labor participation.
According to Mercer, the total score could be even higher if households started saving more and reducing their debts. In addition, the Netherlands can improve the sustainability of its pension system by stimulating labor participation at a higher age, in line with rising life expectancy, according to the consultancy.
Pension system scores well, despite concerns about discounts
The system scores well, despite increasing concerns within the Netherlands about the state of pensions. The coverage ratio at several pension funds is constantly decreasing, so that discounts on pensions seem inevitable.
"The pension system in the Netherlands has a lot to do in the past year. Especially now that the new agreement has been reached and the new pension law is coming," says Marc Heemskerk, pension expert at Mercer. "We are critical with each other, and that is also good because only then can you continue to guarantee quality. But sometimes it is good to cherish your blessings through this type of research and realize that we are doing very well worldwide. "
77Why millions of Dutch people may receive less pension
Pension discounts seem inevitable
Last week, several pension funds announced that the funding ratios had fallen further, making discounts seem inevitable. ABP, the largest pension fund in the Netherlands, saw the coverage ratio decrease from 95.3 percent to 91 percent in the third quarter. Pensioenfonds Zorg en Welzijn (PFZW) and PME recorded coverage ratios of 92.2 percent and 93.4 percent respectively at the end of September.
BpfBouw, the third largest pension fund, also saw the coverage ratio fall, but with 108.1 percent it is still relatively comfortably above the critical limit. For ABP, for example, a reduction must be made if the current coverage ratio on December 31, 2019 is below 95 percent.
See also: Pension fund position deteriorated, discounts seem inevitable