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:

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.



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Animated Video: The History of U.S Counties

Did you know that there are 3,142 different counties in the U.S. today?

Going as far back as the 1600s, English settlers arriving in the New World envisioned counties as a means of accessible government—a county seat was meant to be within a day’s buggy ride for every citizen.

While the role of counties in local government has remained significant in modern times, their boundaries have changed drastically over the years.

This animated map by Alexander Varlamov visualizes the history of U.S. county borders, and how these jurisdictions have evolved over time.

County Equivalents

Before diving in, it’s important to note a few county-equivalents that function similarly but go by different names:

• Boroughs/Census areas: Alaska is made up of 19 boroughs, but the majority of its landmass is not included in them. Rather, it’s officially labeled by the Alaskan government as the unorganized borough.
• Parishes: Instead of counties, Louisiana uses the term parishes because of its French and Catholic heritage.
• Independent cities: These are cities that operate outside their surrounding county’s jurisdiction. There are 41 independent cities in the U.S. and 38 of them are in Virginia.

Over 300 Years of Growth

The number of counties in the U.S. has increased dramatically since the early days of American history. Here’s a look at their growth since 1790:

The first county was established in 1634, over 100 years before the first Census was taken (and long before America gained independence). It was created in James City, Virginia—an interesting location, considering Virginia now has the highest concentration of independent cities.

Why does Virginia have so many independent cities? The state’s separation of counties and cities dates back to the early 1700s. With a rural population and low productivity, it was difficult to establish town centers. After several attempts, the General Assembly gave up. Independent cities were established instead.

Short-lived Counties

Counties as a political organization have been around for hundreds of years, but some individual counties haven’t lasted long.

For instance, Bullfrog County in Nevada was established in 1987 and dissolved just two years later. During its brief existence, it had no population and no infrastructure—and its primary purpose was simply to prevent Yucca Mountain from becoming a nuclear waste dump.

While Bullfrog County has since been dissolved, the controversy around the nuclear waste site is ongoing as of 2020.

Continual Change

The latest official county, Broomfield Country, was established in Colorado in 2001.

Although it’s been decades since the last county was created, there have been continual boundary changes and status updates—sometimes for political reasons. For instance, the Supreme Court recently ruled that half of Oklahoma is within a Native American reservation. While this doesn’t necessarily change ownership, it does affect jurisdiction and county authority.

Though the lines on the map are more or less static now, the invisible lines of county jurisdiction will continue to change and evolve over time.