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Ranked: The Best and Worst Pension Plans, by Country

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The Best and Worst Pension Plans, by Country

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The Best and Worst Pension Plans Worldwide

Each year, millions of people around the world leave the workforce to retire.

But as the global population grows older, and the COVID-19 pandemic accelerates the already rising number of retirees, there is still a large degree of variance in the quality of public pension plans around the world.

Which countries have invested in robust public pension programs, and which lag behind?

This graphic, using 2021 data from Mercer CFA Institute Global Pension Index, compares retirement income systems worldwide.

How the Index Ranks Pension Plans

Because a countryโ€™s pension system is unique to its particular economic and historical context, itโ€™s difficult to draw direct comparisons. However, there are certain elements that pension experts see as universally positive, and that lead to better financial support for older citizens.

As with previous rankings, Mercer and the CFA Institute organized these universal elements into three sub-indexes:

  • Adequacy: The base-level of income, as well as the design of a regionโ€™s private pension system.
  • Sustainability: The state pension age, the level of advanced funding from the 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 43 different countries, representing more than 65% of the worldโ€™s population. This yearโ€™s iteration of the index notably includes four new countriesโ€”Iceland, Taiwan, UAE, and Uruguay.

The Full Ranking

When it comes to the best pension plans across the globe, Iceland, the Netherlands, and Denmark have the top three systems.

CountryOverall ValueAdequacySustainabilityIntegrity
๐Ÿ‡ฆ๐Ÿ‡ท Argentina41.552.727.743.0
๐Ÿ‡ฆ๐Ÿ‡บ Australia75.067.475.786.3
๐Ÿ‡ฆ๐Ÿ‡น Austria53.065.323.574.5
๐Ÿ‡ง๐Ÿ‡ช Belgium64.574.936.387.4
๐Ÿ‡ง๐Ÿ‡ท Brazil54.771.224.171.2
๐Ÿ‡จ๐Ÿ‡ฆ Canada69.869.065.776.7
๐Ÿ‡จ๐Ÿ‡ฑ Chile67.057.668.879.3
๐Ÿ‡จ๐Ÿ‡ณ China55.162.643.559.4
๐Ÿ‡จ๐Ÿ‡ด Colombia58.462.046.269.8
๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark82.081.183.581.4
๐Ÿ‡ซ๐Ÿ‡ฎ Finland73.371.461.593.1
๐Ÿ‡ซ๐Ÿ‡ท France60.579.141.856.8
๐Ÿ‡ฉ๐Ÿ‡ช Germany67.979.345.481.2
๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong61.855.151.187.7
๐Ÿ‡ฎ๐Ÿ‡ธ Iceland84.282.784.686.0
๐Ÿ‡ฎ๐Ÿ‡ณ India43.333.541.861.0
๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia50.444.743.669.2
๐Ÿ‡ฎ๐Ÿ‡ช Ireland68.378.047.482.1
๐Ÿ‡ฎ๐Ÿ‡ฑ Israel77.173.676.183.9
๐Ÿ‡ฎ๐Ÿ‡น Italy53.468.221.374.9
๐Ÿ‡ฏ๐Ÿ‡ต Japan49.852.937.561.9
๐Ÿ‡ฐ๐Ÿ‡ท Korea48.343.452.750.0
๐Ÿ‡ฒ๐Ÿ‡พ Malaysia59.650.657.576.8
๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico49.047.354.743.8
๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands83.582.381.687.9
๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand67.461.862.583.2
๐Ÿ‡ณ๐Ÿ‡ด Norway75.281.257.490.2
๐Ÿ‡ต๐Ÿ‡ช Peru55.058.844.264.1
๐Ÿ‡ต๐Ÿ‡ญ Philippines42.738.952.535.0
๐Ÿ‡ต๐Ÿ‡ฑ Poland55.260.941.365.6
๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia58.161.750.962.5
๐Ÿ‡ธ๐Ÿ‡ฌ Singapore70.773.559.881.5
๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa53.644.346.578.5
๐Ÿ‡ช๐Ÿ‡ธ Spain58.672.928.178.3
๐Ÿ‡ธ๐Ÿ‡ช Sweden72.967.873.780.0
๐Ÿ‡จ๐Ÿ‡ญ Switzerland70.065.467.281.3
๐Ÿ‡น๐Ÿ‡ผ Taiwan51.840.851.969.3
๐Ÿ‡น๐Ÿ‡ญ Thailand40.635.240.050.0
๐Ÿ‡น๐Ÿ‡ท Turkey45.847.728.666.7
๐Ÿ‡ฆ๐Ÿ‡ช UAE59.659.750.272.6
๐Ÿ‡ฌ๐Ÿ‡ง UK71.673.959.884.4
๐Ÿ‡บ๐Ÿ‡พ Uruguay60.762.149.274.4
๐Ÿ‡บ๐Ÿ‡ฒ U.S.61.460.963.659.2
Average61.062.251.772.1

Icelandโ€™s system ranks high across all three sub-indexes. The country offers a state pension with two components: mandatory contributions from both employees and employers, and optional contributions to state-approved pension products.

Its system has a high contribution rate, which ultimately results in a generous state pension that retirees in Iceland can tap into. The country also has a relatively low gender pension gap, meaning the difference between the average female pension versus male pension is relatively smallโ€”especially compared to other OECD countries.

gender gap pensions oecd

On the opposite end of the spectrum, the Philippines, Argentina, and Thailand scored the lowest on the ranking.

Thailand scores particularly low in the adequacy category, with a score of 35.2. To increase its score, Thailand could increase the minimum payments for its poorest demographic and include more employees in occupational pension schemes.

Recommendations for Better Pension Plans

According to the index, countries seem to be steadily improving their pension systems. From 2020 to 2021, the average score of the overall index increased by 1.0.

With an average of 60.7, the index shows that most countries’ systems have some good features, but they also have some significant shortcomings that could be addressed by the following recommendations:

  • Boosting adequacy by increasing coverage, and including more employees in private pensions systems.
  • Increasing sustainability by adjusting retirement pension age to reflect increasing life expectancy, and promoting higher workforce participation from older citizens.
  • Raise integrity by introducing policies that reduce the gender pension gap and discrepancies amongst minorities.

Countries that implement even a few of these changes could make a huge difference for their next generation of retireesโ€”and those that donโ€™t could be in trouble in the near future.

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Pensions

Ranked: The Worldโ€™s 100 Biggest Pension Funds

The worldโ€™s 100 largest pension funds are worth over $17 trillion in total. Which ones are the biggest, and where are they located?

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A preview image of some of the largest pension funds in the world. The Government Pension Investment Fund in Japan is the biggest at $1.7 trillion in assets.

Ranked: The Worldโ€™s 100 Biggest Pension Funds

View the high-resolution of the infographic by clicking here.

Despite economic uncertainty, pension funds saw relatively strong growth in 2021. The worldโ€™s 100 biggest pension funds are worth over $17 trillion in total, an increase of 8.5% over the previous year.

This graphic uses data from the Thinking Ahead Institute to rank the worldโ€™s biggest pension funds, and where they are located.

What is a Pension Fund?

A pension fund is a fund that is designed to provide retirement income. This ranking covers four different types:

  • Sovereign funds: Funds controlled directly by the state. This ranking only includes sovereign funds that are established by national authorities.
  • Public sector funds: Funds that cover public sector workers, such as government employees and teachers, in provincial or state sponsored plans.
  • Private independent funds: Funds controlled by private sector organizations that are authorized to manage pension plans from different employers.
  • Corporate funds: Funds that cover workers in company sponsored pension plans.

Among the largest funds, public sector funds are the most common.

The Largest Pension Funds, Ranked

Here are the top 100 pension funds, organized from largest to smallest.

RankFundMarketTotal Assets
1Government Pension Investment Fund๐Ÿ‡ฏ๐Ÿ‡ต Japan$1.7T
2Government Pension Fund๐Ÿ‡ณ๐Ÿ‡ด Norway$1.4T
3National Pension๐Ÿ‡ฐ๐Ÿ‡ท South Korea$798.0B
4Federal Retirement Thrift๐Ÿ‡บ๐Ÿ‡ธ U.S.$774.2B
5ABP๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$630.4B
6California Public Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$496.8B
7Canada Pension๐Ÿ‡จ๐Ÿ‡ฆ Canada$426.7B
8National Social Security๐Ÿ‡จ๐Ÿ‡ณ China$406.8B
9Central Provident Fund๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$375.0B
10PFZW๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$315.5B
11California State Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$313.9B
12New York State Common๐Ÿ‡บ๐Ÿ‡ธ U.S.$267.8B
13New York City Retirement๐Ÿ‡บ๐Ÿ‡ธ U.S.$266.7B
14Local Government Officials๐Ÿ‡ฏ๐Ÿ‡ต Japan$248.6B
15Employees Provident Fund๐Ÿ‡ฒ๐Ÿ‡พ Malaysia$242.6B
16Florida State Board๐Ÿ‡บ๐Ÿ‡ธ U.S.$213.8B
17Texas Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$196.7B
18Ontario Teachers๐Ÿ‡จ๐Ÿ‡ฆ Canada$191.1B
19National Wealth Fund๐Ÿ‡ท๐Ÿ‡บ Russia$180.7B
20AustralianSuper๐Ÿ‡ฆ๐Ÿ‡บ Australia$169.1B
21Labor Pension Fund๐Ÿ‡น๐Ÿ‡ผ Taiwan$168.9B
22Washington State Board๐Ÿ‡บ๐Ÿ‡ธ U.S.$161.5B
23Public Institute for Social Security๐Ÿ‡ฐ๐Ÿ‡ผ Kuwait$160.0B
24ATP๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$155.4B
25Wisconsin Investment Board๐Ÿ‡บ๐Ÿ‡ธ U.S.$147.9B
26Future Fund๐Ÿ‡ฆ๐Ÿ‡บ Australia$147.9B
27Boeing๐Ÿ‡บ๐Ÿ‡ธ U.S.$147.2B
28Employees' Provident๐Ÿ‡ฎ๐Ÿ‡ณ India$145.0B
29New York State Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$144.4B
30North Carolina๐Ÿ‡บ๐Ÿ‡ธ U.S.$137.1B
31Alecta๐Ÿ‡ธ๐Ÿ‡ช Sweden$136.7B
32GEPF๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa$129.1B
33California University๐Ÿ‡บ๐Ÿ‡ธ U.S.$125.3B
34Bayerische Versorgungskammer๐Ÿ‡ฉ๐Ÿ‡ช Germany$122.0B
35Ohio Public Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$121.6B
36AT&T๐Ÿ‡บ๐Ÿ‡ธ U.S.$119.5B
37Public Service Pension Plan๐Ÿ‡จ๐Ÿ‡ฆ Canada$117.9B
38National Federation of Mutual Aid๐Ÿ‡ฏ๐Ÿ‡ต Japan$117.1B
39Metaal/tech. Bedrijven๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$115.8B
40IBM๐Ÿ‡บ๐Ÿ‡ธ U.S.$115.4B
41Universities Superannuation๐Ÿ‡ฌ๐Ÿ‡ง UK$111.2B
42Virginia Retirement๐Ÿ‡บ๐Ÿ‡ธ U.S.$110.0B
43Pension Fund Association๐Ÿ‡ฏ๐Ÿ‡ต Japan$109.8B
44Raytheon Technologies๐Ÿ‡บ๐Ÿ‡ธ U.S.$108.9B
45Michigan Retirement๐Ÿ‡บ๐Ÿ‡ธ U.S.$108.0B
46Aware Super๐Ÿ‡ฆ๐Ÿ‡บ Australia$107.5B
47New Jersey๐Ÿ‡บ๐Ÿ‡ธ U.S.$104.5B
48Minnesota State Board๐Ÿ‡บ๐Ÿ‡ธ U.S.$102.9B
49PFA Pension๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$102.7B
50Kaiser๐Ÿ‡บ๐Ÿ‡ธ U.S.$101.0B
51Georgia Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$100.9B
52Oregon Public Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$100.4B
53Massachusetts PRIM๐Ÿ‡บ๐Ÿ‡ธ U.S.$98.5B
54Qsuper๐Ÿ‡ฆ๐Ÿ‡บ Australia$96.5B
55General Motors๐Ÿ‡บ๐Ÿ‡ธ U.S.$96.1B
56Ontario Municipal Employees๐Ÿ‡จ๐Ÿ‡ฆ Canada$95.7B
57Ohio State Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$95.1B
58AP Fonden 7๐Ÿ‡ธ๐Ÿ‡ช Sweden$94.4B
59Healthcare of Ontario๐Ÿ‡จ๐Ÿ‡ฆ Canada$90.5B
60General Electric๐Ÿ‡บ๐Ÿ‡ธ U.S.$90.5B
61Employees' Pension Fund๐Ÿ‡ฎ๐Ÿ‡ณ India$89.5B
62Bouwnijverheid๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$88.5B
63UPS๐Ÿ‡บ๐Ÿ‡ธ U.S.$86.8B
64United Nations Joint Staff๐Ÿ‡บ๐Ÿ‡ธ U.S.$86.2B
65Lockheed Martin๐Ÿ‡บ๐Ÿ‡ธ U.S.$85.7B
66Quebec Pension๐Ÿ‡จ๐Ÿ‡ฆ Canada$81.4B
67National Public Service๐Ÿ‡ฏ๐Ÿ‡ต Japan$79.9B
68Tennessee Consolidated๐Ÿ‡บ๐Ÿ‡ธ U.S.$79.0B
69Royal Bank of Scotland Group๐Ÿ‡ฌ๐Ÿ‡ง UK$78.3B
70Bank of America๐Ÿ‡บ๐Ÿ‡ธ U.S.$76.3B
71BT Group๐Ÿ‡ฌ๐Ÿ‡ง UK$74.3B
72Keva๐Ÿ‡ซ๐Ÿ‡ฎ Finland$73.3B
73Ford๐Ÿ‡บ๐Ÿ‡ธ U.S.$72.8B
74PME๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$72.7B
75Los Angeles County Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$72.7B
76Quebec Government & Public๐Ÿ‡จ๐Ÿ‡ฆ Canada$72.4B
77UniSuper๐Ÿ‡ฆ๐Ÿ‡บ Australia$72.1B
78Northrop Grumman๐Ÿ‡บ๐Ÿ‡ธ U.S.$72.0B
79Pennsylvania School Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$70.4B
80Lloyds Banking Group๐Ÿ‡ฌ๐Ÿ‡ง UK$69.7B
81Ilmarinen๐Ÿ‡ซ๐Ÿ‡ฎ Finland$69.1B
82Colorado Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$68.6B
83Maryland State Retirement๐Ÿ‡บ๐Ÿ‡ธ U.S.$68.5B
84AMF Pension๐Ÿ‡ธ๐Ÿ‡ช Sweden$67.3B
85Varma๐Ÿ‡ซ๐Ÿ‡ฎ Finland$67.1B
86Wells Fargo๐Ÿ‡บ๐Ÿ‡ธ U.S.$66.0B
87Sunsuper๐Ÿ‡ฆ๐Ÿ‡บ Australia$66.0B
88Verizon๐Ÿ‡บ๐Ÿ‡ธ U.S.$64.1B
89Illinois Teachers๐Ÿ‡บ๐Ÿ‡ธ U.S.$64.0B
90J.P. Morgan Chase๐Ÿ‡บ๐Ÿ‡ธ U.S.$62.8B
91Electricity Supply Pension๐Ÿ‡ฌ๐Ÿ‡ง UK$62.5B
92FedEx๐Ÿ‡บ๐Ÿ‡ธ U.S.$60.7B
93Nevada Public Employees๐Ÿ‡บ๐Ÿ‡ธ U.S.$58.8B
94B.C. Municipal๐Ÿ‡จ๐Ÿ‡ฆ Canada$58.7B
95AP Fonden 4๐Ÿ‡ธ๐Ÿ‡ช Sweden$57.7B
96Missouri Schools & Education๐Ÿ‡บ๐Ÿ‡ธ U.S.$57.0B
97AP Fonden 3๐Ÿ‡ธ๐Ÿ‡ช Sweden$55.9B
98Social Insurance Funds๐Ÿ‡ป๐Ÿ‡ณ Vietnam$55.7B
99Organization for Workers๐Ÿ‡ฏ๐Ÿ‡ต Japan$55.6B
100Illinois Municipal๐Ÿ‡บ๐Ÿ‡ธ U.S.$54.9B

U.S. fund data are as of Sep. 30, 2021, and non-U.S. fund data are as of Dec. 31, 2021. There are some exceptions as noted in the graphic footnotes.

Japanโ€™s Government Pension Investment Fund (GPIF) is the largest in the ranking for the 21st year in a row. For a time, the fund was the largest holder of domestic stocks in Japan, though the Bank of Japan has since taken that title. Given its enormous size, investors closely follow the GPIFโ€™s actions. For instance, the fund made headlines for deciding to start investing in startups, because the move could entice other pensions to make similar investments.

America is home to 47 funds on the list, including the largest public sector fund: the Thrift Savings Plan (TSP), overseen by the Federal Retirement Thrift Investment Board. Because of its large financial influence, both political parties have been accused of using it as a political tool. Democrats have pushed to divest assets in fossil fuel companies, while Republicans have proposed blocking investment in Chinese-owned companies.

Russiaโ€™s National Wealth Fund comes in at number 19 on the list. The fund is designed to support the public pension system and help balance the budget as needed. With Russiaโ€™s economy facing difficulties amid the Russia-Ukraine conflict, the government has also used it as a rainy day fund. For instance, Russia has set aside $23 billion from the fund to replace foreign aircraft with domestic models, because Western sanctions have made it difficult to source replacement parts for foreign planes.

The Future of Pension Funds

The biggest pension funds can have a large influence in the market because of their size. Of course, they are also responsible for providing retirement income to millions of people. Pension funds face a variety of challenges in order to reach their goals:

  • Geopolitical conflict creates volatility and uncertainty
  • High inflation and low interest rates (relative to long-term averages) limit return potential
  • Aging populations mean more withdrawals and less fund contributions

Some pension funds are turning to alternative assets, such as private equity, in pursuit of more diversification and higher returns. Of course, these investments can also carry more risk.

Ontario Teachersโ€™ Pension Plan, number 18 on the list, invested $95 million in the now-bankrupt cryptocurrency exchange FTX. The plan made the investment through its venture growth platform, to โ€œgain small-scale exposure to an emerging area in the financial technology sector.โ€

In this case, the investmentโ€™s failure is expected to have a minimal impact given it only made up 0.05% of the planโ€™s net assets. However, it does highlight the challenges pension funds face to generate sufficient returns in a variety of macroeconomic environments.

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