Canada’s retirement system ranks No. 12 out of 47 countries but has room for improvement amid a challenging economy and ageing population, according to a new report by Mercer and the CFA Institute.
The report analyzed retirement systems based on adequacy, sustainability and integrity. It ranked the Netherlands with the highest score (85.1 out of 100), followed by Iceland (83.3) and Denmark (81.3), while Argentina had the lowest overall score (42.3).
Canada received an overall score of 70.2 — down slightly from 70.6 in 2022 but greater than the 2023 average (62.9) — and was ranked No. 12 in terms of sustainability with a score of 64.5, No. 19 for adequacy (71.1) and No. 20 for integrity (76.7).
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The report suggested several measures for strengthening Canada’s retirement system, including the development of new retirement products to increase coverage through employer-sponsored retirement plans; the introduction of a minimum access age for all retirement plans; increasing the level of household savings and reducing the level of household debt; and reducing government debt as a percentage of gross domestic product.
“Canada’s retirement system continues to rank well globally, with policy-makers committed to making necessary adjustments to adapt to new challenges,” said F. Hubert Tremblay, partner and senior wealth advisor at Mercer Canada, in a press release. “However, an environment rife with inflationary pressures, steep interest rates, labour shortages, an ageing population and some signs of a recession poses risks for employers, employees and the long-term efficacy of our retirement and health-care systems like never before.
“Pension plan sponsors, their advisors and governments all have important roles to play examining opportunities to ensure that Canadians have reliable, low-cost and flexible retirement savings solutions, while making programs more attractive for employees who want to work longer.”
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