This report rates global pension systems, recommending reforms to improve outcomes and participant trust in an era of aging populations and increasing government intervention.
Report Overview
The primary objective of the Mercer CFA Institute Global Pension Index 2025 is to benchmark retirement income systems worldwide using more than 50 indicators.
Comparing pension systems globally is valuable for policymakers but not simple. Systems vary based on unique cultural, economic, and historical contexts. With the inclusion of Kuwait, Namibia, Oman, and Panama this year, the report now includes 52 retirement systems, representing 65% of the world’s population. It compares those systems across three key factors: adequacy (current benefits), sustainability (future viability), and integrity (regulation).
The research highlights significant diversity between systems around the world, with index scores ranging from 43.8 to 85.4. The Netherlands, Iceland, Denmark, Singapore, and Israel rank highest. These nations offer strong benefits, sound regulation, and solid asset bases. India ranks lowest.
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Each year, the index also features a deep dive into a topical issue. The 2025 report focuses on balancing government influence on private pension fund investments. Governments around the world influence, and in many instances, restrict private pension funds’ investments. Increased global uncertainty and the increasing size of pension fund assets are now leading some governments to consider encouraging more domestic investment by pension funds in areas of national priority for the longer-term benefit of society.
This special chapter suggests the following eight principles to balance between acting in the best interests of private pension plan participants and acting in the broader national interest.
- Retirement first. The primary purpose of a pension fund is to provide retirement income to the fund’s participants and their dependents.
- Fiduciary integrity. Fiduciaries must act in the best interests of the pension fund’s beneficiaries.
- Robust governance. Pension legislation should require all pension funds to develop a comprehensive investment policy and follow sound investment governance practices.
- Full market access. Pension funds must consider the full range of available investment opportunities appropriate for their size and complexity, recognizing that available opportunities are impacted by a country’s economic development.
- Policy incentives, not mandates. Governments can make particular investments attractive to pension funds without the use of compulsion and should refrain from requiring a “floor” level of investment in a particular asset class. The actual investment decision should be left to the pension fund.
- Collaborative scale. Pension funds should collaborate with each other and with the government to increase investment opportunities in areas where they may not otherwise have the scale or risk appetite to invest; for example, infrastructure projects through public–private partnerships.
- Transparency, not constraints. There should be transparent public disclosure relating to the actual investments held and their returns and risks, but no performance tests or fee caps should be applied to pension fund investments.
- Macro awareness. When private pension fund assets are a significant percentage of GDP, governments must recognize the impact and interactions between their fiscal and social policies and the implications for present and future retirees.