Markets
Ranked: The Best and Worst Pension Plans, by Country
Ranked: Countries with the Best and Worst Pension Plans
The global population is aging—by 2050, one in six people will be over the age of 65.
As our aging population nears retirement and gets closer to cashing in their pensions, countries need to ensure their pension systems can withstand the extra strain.
This graphic uses data from the Melbourne Mercer Global Pension Index (MMGPI) to showcase which countries are best equipped to support their older citizens, and which ones aren’t.
The Breakdown
Each country’s pension system has been shaped by its own economic and historical context. This makes it difficult to draw precise comparisons between countries—yet there are certain universal elements that typically lead to adequate and stable support for older citizens.
MMGPI organized these universal elements into three sub-indexes:
- Adequacy: The base-level of income, as well as the design of a region’s private pension system.
- Sustainability: The state pension age, the level of advanced funding from government, and the level of government debt.
- Integrity: Regulations and governance put in place to protect plan members.
These three measures were used to rank the pension system of 37 different countries, representing over 63% of the world’s population.
Here’s how each country ranked:
Country | Overall Value | Adequacy | Sustainability | Integrity |
---|---|---|---|---|
Argentina | 39.5 | 43.1 | 31.9 | 44.4 |
Australia | 75.3 | 70.3 | 73.5 | 85.7 |
Austria | 53.9 | 68.2 | 22.9 | 74.4 |
Brazil | 55.9 | 71.8 | 27.7 | 69.8 |
Canada | 69.2 | 70 | 61.8 | 78.2 |
Chile | 68.7 | 59.4 | 71.7 | 79.2 |
China | 48.7 | 60.5 | 36.7 | 46.5 |
Colombia | 58.4 | 61.4 | 46 | 70.8 |
Denmark | 80.3 | 77.5 | 82 | 82.2 |
Finland | 73.6 | 73.2 | 60.7 | 92.3 |
France | 60.2 | 79.1 | 41 | 56.8 |
Germany | 66.1 | 78.3 | 44.9 | 76.4 |
Hong Kong | 61.9 | 54.5 | 54.5 | 86.9 |
India | 45.8 | 39.9 | 44.9 | 56.3 |
Indonesia | 52.2 | 46.7 | 47.6 | 67.5 |
Ireland | 67.3 | 81.5 | 44.6 | 76.3 |
Italy | 52.2 | 67.4 | 19 | 74.5 |
Japan | 48.3 | 54.6 | 32.2 | 60.8 |
Korea | 49.8 | 47.5 | 52.6 | 49.6 |
Malaysia | 60.6 | 50.5 | 60.5 | 76.9 |
Mexico | 45.3 | 37.5 | 57.1 | 41.3 |
Netherlands | 81 | 78.5 | 78.3 | 88.9 |
New Zealand | 70.1 | 70.9 | 61.5 | 80.7 |
Norway | 71.2 | 71.6 | 56.8 | 90.6 |
Peru | 58.5 | 60 | 52.4 | 64.7 |
Philippines | 43.7 | 39 | 55.5 | 34.7 |
Poland | 57.4 | 62.5 | 45.3 | 66 |
Saudi Arabia | 57.1 | 59.6 | 50.5 | 62.2 |
Singapore | 70.8 | 73.8 | 59.7 | 81.4 |
South Africa | 52.6 | 42.3 | 46 | 78.4 |
Spain | 54.7 | 70 | 26.9 | 69.1 |
Sweden | 72.3 | 67.5 | 72 | 80.2 |
Switzerland | 66.7 | 57.6 | 65.4 | 83 |
Thailand | 39.4 | 35.8 | 38.8 | 46.1 |
Turkey | 42.2 | 42.6 | 27.1 | 62.8 |
UK | 64.4 | 60 | 55.3 | 84 |
U.S. | 60.6 | 58.8 | 62.9 | 60.4 |
The Importance of Sustainability
While all three sub-indexes are important to consider when ranking a country’s pension system, sustainability is particularly significant in the modern context. This is because our global population is increasingly skewing older, meaning an influx of people will soon be cashing in their retirement funds. As a consequence, countries need to ensure their pension systems are sustainable over the long-term.
There are several factors that affect a pension system’s sustainability, including a region’s private pension system, the state pension age, and the balance between workers and retirees.
The country with the most sustainable pension system is Denmark. Not only does the country have a strong basic pension plan—it also has a mandatory occupational scheme, which means employers are obligated by law to provide pension plans for their employees.
Adequacy versus Sustainability
Several countries scored high on adequacy but ranked low when it came to sustainability. Here’s a comparison of both measures, and how each country scored:
Ireland took first place for adequacy, but scored relatively low on the sustainability front at 27th place. This can be partly explained by Ireland’s low level of occupational coverage. The country also has a rapidly aging population, which skews the ratio of workers to retirees. By 2050, Ireland’s worker to retiree ratio is estimated to go from 5:1 to 2:1.
Similar to Ireland, Spain ranks high in adequacy but places extremely low in sustainability.
There are several possible explanations for this—while occupational pension schemes exist, they are optional and participation is low. Spain also has a low fertility rate, which means their worker-to-retiree ratio is expected to decrease.
Steps Towards a Better System
All countries have room for improvement—even the highest-ranking ones. Some general recommendations from MMGPI on how to build a better pension system include:
- Increasing the age of retirement: Helps maintain a more balanced worker-to-retiree ratio.
- Enforcing mandatory occupational schemes: Makes employers obligated to provide pension plans for their employees.
- Limiting access to benefits: Prevents people from dipping into their savings preemptively, thus preserving funds until retirement.
- Establishing strong pension assets to fund future liabilities: Ideally, these assets are more than 100% of a country’s GDP.
Pension systems across the globe are under an increasing amount of pressure. It’s time for countries to take a hard look at their pension systems to make sure they’re ready to support their aging population.
Support the Future of Data Storytelling
Sorry to interrupt your reading, but we have a favor to ask. At Visual Capitalist we believe in a world where data can be understood by everyone. That’s why we want to build the VC App - the first app of its kind combining verifiable and transparent data with beautiful, memorable visuals. All available for free.
As a small, independent media company we don’t have the expertise in-house or the funds to build an app like this. So we’re asking our community to help us raise funds on Kickstarter.
If you believe in data-driven storytelling, join the movement and back us on Kickstarter!
Thank you.

Markets
News Explainer: The Economic Crisis in Sri Lanka
Sri Lanka is currently in an economic crisis with over $50 billion in debt and consumer inflation at 39%. So how did they get here?

Explained: the Economic Crisis in Sri Lanka
Sri Lanka is currently in an economic and political crisis of mass proportions, recently culminating in a default on its debt payments. The country is also nearly at empty on their foreign currency reserves, decreasing the ability to purchase imports and driving up domestic prices for goods.
There are several reasons for this crisis and the economic turmoil has sparked mass protests and violence across the country. This visual breaks down some of the elements that led to Sri Lanka’s current situation.
A Timeline of Events
The ongoing problems in Sri Lanka have bubbled up after years of economic mismanagement. Here’s a brief timeline looking at just some of the recent factors.
2009
In 2009, a decades-long civil war in the country ended and the government’s focus turned inward towards domestic production. However, a stress on local production and sales, instead of exports, increased the reliance on foreign goods.
2019
Unprompted cuts were introduced on income tax in 2019, leading to significant losses in government revenue, draining an already cash-strapped country.
2020
The COVID-19 pandemic hit the world causing border closures globally and stifling one of Sri Lanka’s most lucrative industries. Prior to the pandemic, in 2018, tourism contributed nearly 5% of the country’s GDP and generated over 388,000 jobs. In 2020, tourism’s share of GDP had dropped to 0.8%, with over 40,000 jobs lost to that point.
2021
Recently, the Sri Lankan government introduced a ban on foreign-made chemical fertilizers. The ban was meant to counter the depletion of the country’s foreign currency reserves.
However, with only local, organic fertilizers available to farmers, a massive crop failure occurred and Sri Lankans were subsequently forced to rely even more heavily on imports, further depleting reserves.
April 2022
In early April this year, massive protests calling for President Gotabaya Rajapaksa’s resignation, sparked in Sri Lanka’s capital city, Colombo.
May 2022
In May, pro-government supporters brutally attacked protesters. Subsequently, Prime Minister Mahinda Rajapaksa, brother of President Rajapaksa, stepped down and was replaced with former PM, Ranil Wickremesinghe.
June 2022
Recently, the government approved a four-day work week to allow citizens an extra day to grow food, as prices continue to shoot up. Food inflation increased over 57% in May.
Additionally, the increasing prices on grain caused by the war in Ukraine and rising fuel prices globally have played into an already dire situation in Sri Lanka.
The Key Information
“Our economy has completely collapsed.”
Prime minister Ranil Wickremesinghe to Parliament last week.
One of the main causes of the economic crisis in Sri Lanka is the reliance on imports and the amount spent on them. Let’s take a look at the numbers:
- 2021 total imports = $20.6 billion USD
- 2022 total imports (to March) = $5.7 billion USD
In contrast, the most recent reported foreign currency reserve levels in the country were at an abysmal $50 million, having plummeted an astounding 99%, from $7.6 billion in 2019.
Some of the top imports in 2021, according to the country’s central bank were:
- Refined petroleum = $2.8 billion
- Textiles = $3.1 billion
- Chemical products = $1.1 billion
- Food & beverage = $1.7 billion
Of course, without the cash to purchase these goods from abroad, Sri Lankans face an increasingly drastic situation.
Additionally, the debt Sri Lanka has incurred is huge, further hampering their ability to boost their reserves. Recently, they defaulted on a $78 million loan from international creditors, and in total, they’ve borrowed $50.7 billion.
The largest source of their debt is by far due to market borrowings, followed closely by loans taken from the Asian Development Bank, China, and Japan, among others.
What it Means
Sri Lanka is home to more than 22 million people who are rapidly losing the ability to purchase everyday goods. Consumer inflation reached 39% at the end of May.
Due to power outages meant to save energy and fuel, schools are currently shuttered and children have nowhere to go during the day. Protesters calling for the president’s resignation have been camped in the capital for months, facing tear gas from police and backlash from president Rajapaksa’s supporters, but many have also responded violently to pushback.
India and China have agreed to send help to the country and the the International Monetary Fund recently arrived in the country to discuss a bailout. Additionally, the government has sent ministers to Russia to discuss a deal for discounted oil imports.
A Foreshadowing for Low Income Countries
Governments need foreign currency in order to purchase goods from abroad. Without the ability to purchase or borrow foreign currency, the Sri Lankan government cannot buy desperately needed imports, including food staples and fuel, causing domestic prices to rise.
Furthermore, defaults on loan payments discourage foreign direct investment and devalue the national currency, making future borrowing more difficult.
What’s happening in Sri Lanka may be an ominous preview of what’s to come in other low and middle-income countries, as the risk of debt distress continues to rise globally.
The Debt Service Suspension Initiative (DSSI) was implemented by G20 countries, suspending nearly $13 billion in debt from the start of the pandemic until late 2021.
Some DSSI and LIC countries facing a high risk of debt distress include Zambia, Ethiopia, and Tajikistan, to name a few.
Going forward, Sri Lanka’s next steps in managing this situation will either serve as a useful example for other countries at risk or a warning worth heeding.
Note: The debt breakdown in the main visualization represents total outstanding external debt owed to foreign creditors rather total debt.
Markets
Interest Rate Hikes vs. Inflation Rate, by Country
Inflation rates are reaching multi-decade highs in some countries. How aggressive have central banks been with interest rate hikes?

Interest Rate Hikes vs. Inflation Rate, by Country
Imagine today’s high inflation like a car speeding down a hill. In order to slow it down, you need to hit the brakes. In this case, the “brakes” are interest rate hikes intended to slow spending. However, some central banks are hitting the brakes faster than others.
This graphic uses data from central banks and government websites to show how policy interest rates and inflation rates have changed since the start of the year. It was inspired by a chart created by Macrobond.
How Do Interest Rate Hikes Combat Inflation?
To understand how interest rates influence inflation, we need to understand how inflation works. Inflation is the result of too much money chasing too few goods. Over the last several months, this has occurred amid a surge in demand and supply chain disruptions worsened by Russia’s invasion of Ukraine.
In an effort to combat inflation, central banks will raise their policy rate. This is the rate they charge commercial banks for loans or pay commercial banks for deposits. Commercial banks pass on a portion of these higher rates to their customers, which reduces the purchasing power of businesses and consumers. For example, it becomes more expensive to borrow money for a house or car.
Ultimately, interest rate hikes act to slow spending and encourage saving. This motivates companies to increase prices at a slower rate, or lower prices, to stimulate demand.
Rising Interest Rates and Inflation
With inflation rates hitting multi-decade highs in some countries, many central banks have announced interest rate hikes. Below, we show how the inflation rate and policy interest rate have changed for select countries and regions since January 2022. The jurisdictions are ordered from highest to lowest current inflation rate.
Jurisdiction | Jan 2022 Inflation | May 2022 Inflation | Jan 2022 Policy Rate | Jun 2022 Policy Rate |
---|---|---|---|---|
UK | 5.50% | 9.10% | 0.25% | 1.25% |
U.S. | 7.50% | 8.60% | 0.00%-0.25% | 1.50%-1.75% |
Euro Area | 5.10% | 8.10% | 0.00% | 0.00% |
Canada | 5.10% | 7.70% | 0.25% | 1.50% |
Sweden | 3.90% | 7.20% | 0.00% | 0.25% |
New Zealand | 5.90% | 6.90% | 0.75% | 2.00% |
Norway | 3.20% | 5.70% | 0.50% | 1.25% |
Australia | 3.50% | 5.10% | 0.10% | 0.85% |
Switzerland | 1.60% | 2.90% | -0.75% | -0.25% |
Japan | 0.50% | 2.50% | -0.10% | -0.10% |
The Euro area has 3 policy rates; the data above represents the main refinancing operations rate. Inflation data is as of May 2022 except for New Zealand and Australia, where the latest quarterly data is as of March 2022.
The U.S. Federal Reserve has been the most aggressive with its interest rate hikes. It has raised its policy rate by 1.5% since January, with half of that increase occurring at the June 2022 meeting. Jerome Powell, the Federal Reserve chair, said the committee would like to “do a little more front-end loading” to bring policy rates to normal levels. The action comes as the U.S. faces its highest inflation rate in 40 years.
On the other hand, the European Union is experiencing inflation of 8.1% but has not yet raised its policy rate. The European Central Bank has, however, provided clear forward guidance. It intends to raise rates by 0.25% in July, by a possibly larger increment in September, and with gradual but sustained increases thereafter. Clear forward guidance is intended to help people make spending and investment decisions, and avoid surprises that could disrupt markets.
Pacing Interest Rate Hikes
Raising interest rates is a fine balancing act. If central banks raise rates too quickly, it’s like slamming the brakes on that car speeding downhill: the economy could come to a standstill. This occurred in the U.S. in the 1980’s when the Federal Reserve, led by Chair Paul Volcker, raised the policy rate to 20%. The economy went into a recession, though the aggressive monetary policy did eventually tame double digit inflation.
However, if rates are raised too slowly, inflation could gather enough momentum that it becomes difficult to stop. The longer high price increases linger, the more future inflation expectations build. This can result in people buying more in anticipation of prices rising further, perpetuating high demand.
“There’s always a risk of going too far or not going far enough, and it’s going to be a very difficult judgment to make.” — Jerome Powell, U.S. Federal Reserve Chair
It’s worth noting that while central banks can influence demand through policy rates, this is only one side of the equation. Inflation is also being caused by supply chain issues, a problem that is more or less outside of the control of central banks.
-
Money2 weeks ago
Mapping the Migration of the World’s Millionaires
-
Markets2 weeks ago
Visualizing the Coming Shift in Global Economic Power (2006-2036p)
-
Datastream3 weeks ago
Ranked: These Are 10 of the World’s Least Affordable Housing Markets
-
Demographics2 weeks ago
Mapped: A Decade of Population Growth and Decline in U.S. Counties
-
Misc3 weeks ago
Visualizing Well-Known Airlines by Fleet Composition
-
Misc2 weeks ago
Iconic Infographic Map Compares the World’s Mountains and Rivers
-
Energy2 days ago
Who’s Still Buying Fossil Fuels From Russia?
-
Markets6 days ago
Interest Rate Hikes vs. Inflation Rate, by Country