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The 13 Best Pension Systems in the World

The U.S. doesn’t quite measure up … big surprise.

The Netherlands still has the best pension system in the world.

According to the recently released 2019 edition of the Melbourne Mercer Global Pensions Index, the Netherlands, which also took the top spot last year, and runner-up Denmark were the only two nations of the 37 studied to receive an A+ grade (a score over 80.0) for the level of financial security they provide citizens in retirement.

The U.K. and the U.S. both earned C+ grades (low 60s), coming in 14th and 16th place, respectively. Both had their scores hurt by poor performance in the area of minimum pensions for low-income pensioners. Thailand was in the bottom spot.

The survey, which covers countries containing almost two-thirds of the world’s population, uses 40 metrics to assess whether a system leads to improved financial outcomes for retirees, whether it is sustainable, and whether it has the trust and confidence of the community. These categories, denoted as “Adequacy,” “Sustainability” and “Integrity,” take into account numerous factors.

Adequacy grades benefits, system design, savings, tax support, home ownership and growth assets.

Sustainability grades pension coverage, total assets, contributions, demography, government debt and economic growth.

Integrity grades regulation, governance, protection, communication and operating costs.

Beyond the top few slots, one of the main themes the data demonstrate is the generally inverse relationship between adequacy and sustainability. If a nation scores high in one, it usually doesn’t do quite so well in the other. That it’s difficult to balance these two factors isn’t exactly a revelation: The more money you give out, the more difficult it is to maintain the system’s war chest, but seeing just how many countries struggle with this dichotomy is interesting nonetheless.

Here are the top 13 pensions systems in the world and their attendant grades (all scores out of 100):

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