Comparing Pension Systems Across Countries

Mercer Consulting recently published the Melbourne Mercer Global Pension Index report rating pension systems around the world. The U.S. pension system received a “C” grade based on this study. Denmark has the world’s best system followed by The Netherlands and Australia. It is interesting that the pension system of Chile is ranked highly with the systems in many other developed countries.

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Source: Mercer

The study defines the U.S. pension system as follows:

The United States’ retirement income system comprises a social security system with a progressive benefit formula based on lifetime earnings, adjusted to a current dollar basis, together with a means tested top-up benefit; and voluntary private pensions, which may be occupational or personal.

Here is a chart showing source of income as a percentage of total income for seniors among OECD countries:


Source: Senir Citizens Around The World, Le Monde

For senior citizens in the U.S. the majority of the income comes from personal sources such as own’s savings (capital) and pensions offered by companies they worked for (work). Public transfers such as social security income is the lowest for U.S. seniors when compared to other countries. French senior citizens receive the highest income from public transfers.

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