Canada’s retirement income system has held onto sixth position in the Melbourne Mercer Global Pension Index, reinforcing its position as one of the leading retirement income systems in the world.
While Canada’s index value fell slightly to 67.9 this year from 69.2 in 2012, it maintained a B grade in the index, which indicates a system that has a sound structure, with many good features, but has some areas for improvement.
The top three spots were held by Denmark, Netherlands, and Australia respectively. Denmark’s well-funded pension system with its high level of assets and contributions, the provision of adequate benefits and a private pension system with developed regulations are the primary reasons for its top spot.
“Canada’s retirement system continues to be one of the strongest systems in the world and stands to benefit from rising long-term interest rates,” says Scott Clausen, a partner in Mercer’s retirement business in Toronto.
“Canada has been able to maintain its strong rating by providing a combination of universal pensions, income-tested pensions, employer pensions and individual RRSPs, although there is always room for improvement.”
Clausen added that Canada’s global ranking could be improved by increasing the number of employees covered by employer pension plans and boosting the level of retirement savings for middle-income households.
The Melbourne Mercer Global Pension Index is now in its fifth year and has increased to 20 countries in 2013 from 11 countries in 2009. The index looks objectively at both the publicly funded and private components of a system, as well as personal assets and savings outside the pension system. The index is produced by Mercer and the Australian Centre for Financial Studies and is funded by the Victorian State Government.
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