International pension comparison: Finnish pension system 7th best – still tops the integrity sub-index
This year, Finland ranked seventh in the international Mercer CFA Institute Global Pension Index comparison. Finland dropped one notch compared to 2023. In the integrity sub-index, the Finnish pension system continues to outrank the others.
Finland’s total score in the Mercer comparison weakened slightly this year. In 2024, Finland scored 75.9 points, down from 76.6 in 2023. This small drop was enough to send Finland from sixth to seventh place in the comparison.
Mercer benchmarks the retirement income systems of various countries using adequacy, sustainability and integrity as sub-indices.
“Finland’s score for adequacy are still fairly good: 77 points out of 100. It is slightly less than last year, but the scores still clearly indicate that our pension system produces a reasonable income for our pensioners”, says Liaison Manager Mika Vidlund from the Finnish Centre for Pensions.
Vidlund focuses more on the sustainability of the pension system.
“In terms of sustainability, our score was clearly lower than in 2023. The financial sustainability of our pension system is a very topical question right now as the negotiations for the next pension reform are underway.”
The Mercer comparison indicates that the operational environment of pensions is more challenging in Finland than in the other top countries. All countries that outrank Finland are among the best in terms of financial sustainability.
“It’s also notable that the funding-based pension system in Singapore has passed Finland in the comparison. At the same time, Chile has passed Sweden and edged ahead into the top ten, knowcking the UK out of the top group”, Vidlund points out.
Mercer’s policy recommendations unchanged
Reliable and transparent governance has always been Finland’s strength in the Mercer comparison. This trend continues. Once again, the Finnish pension system was ranked the most transparent and reliable pension system in the world.
In reliable governance, Mercer evaluates the regulation of the pension system, the security of pension benefits, customer communication and operating costs.
In its policy recommendations, Mercer suggests that Finland improves the level of minimum pensions, increases the household savings ratio and reduces the level of household debt.
Other areas of development for Finland listed by the Global Pension Index include increasing the funded component of pension contributions. In addition, Finland is encouraged to split the pension entitlements between both parties in a divorce.
Nearly 50 countries included in the Mercer comparison
The Mercer CFA Institue Global Pension Index comparison is compiled by Mercer, an international consultancy firm, that benchmarks the retirement income system’s of different countries with the help of more than 50 indicators.
The countries’ total scores are calculated using a weighted average. The weightings used are 40% for the adequacy sub-index, 35% for the sustainability sub-index and 25% for the integrity sub-index.
This year, 48 countries participated in the benchmarking, with Vietnam joining the comparison for the first time.
The Global Pension Index report has been published since 2009.
Read more:
