Rating retirement systems

RATING RETIREMENT SYSTEMS Key findings from the Melbourne Mercer Global Pension Index The Melbourne Mercer Global Pension Index compares retirement income systems in 16 countries representing more than half of the world's population, and rates these systems based on their adequacy, sustainability and integrity. Check out the grade for each country and the weaknesses in each system that need to be addressed. MAKING THE GRADE No country earned an A in this year's study, but several received a B or B+. These grades take into account more than 40 indicators to arrive at an overall index score for each country. None B+ Netherlands Australia Sweden Switzerland Canada UK C+ Chile Poland Brazil US Singapore France Germany Japan India China None SOURCE: Melbourne Mercer Global Pension Index, 2011 AVERAGE SCORES MOVE UP SLIGHTLY While many changes took place within individual country scores, the overall index score across the 14 countries studied in both 2010 and 2011 moved up only slightly. TOTAL AVERAGE INDEX SCORE* 61.7% 61.9% 2010 2011 * Scores for India and Poland are not included, as they were added to the Index in 2011. SOURCE: Melbourne Mercer Global Pension Index, 2011 BIGGEST YEAR-OVER- YEAR CHANGES Only six countries stayed within one point of their 2010 index scores. The rest saw sharper increases or decreases. Biggest increases 2010-2011 2010 2011 Chile UK 59.9% 64.9% 63.7% 66.0% CHANGE: 5.0 CHANGE: 2.3 Biggest declines 2010-2011 Singapore Switzerland 59.6% 56.7% 75.3% 72.7% CHANGE: -2.9 CHANGE: -2.6 SOURCE: Melbourne Mercer Global Pension Index, 2011 THE GOLD STANDARD Mercer's study suggests that, with reforms and enhancements, a developed economy could achieve an A-grade pension system with an overall index score of 83. Component scores would need to improve as follows to accomplish this. 88.4 61.4 Adequacy Gold standard 2011 average 88.0 73.1 Integrity 73.5 50.5 Sustainability SOURCE: Melbourne Mercer Global Pension Index, 2011