Finland has the most reliable and transparent pension system in the world according to the Melbourne Mercer Global Pension Index. Overall, the Finnish pension system was ranked fourth. The Index compares pension systems around the world.
Esko Kivisaari, Deputy Managing Director of the Federation of Finnish Financial Services, is glad that the value of the Finnish earnings-related pension scheme is recognised internationally. “A good pension system is sustainable in the long term. We should take care to maintain the Finnish system and its reputation”, Kivisaari says.
The Melbourne Mercer Global Pension Index, published on October 24, assessed pension systems in 27 countries around the world. The international comparison was conducted for the eighth time. This year, Finland improved its position by two places, ranking fourth after Denmark, the Netherlands, and Australia.
According to the Finnish Centre for Pensions, the decision to raise retirement ages was one contributing factor to Finland’s improved ranking. The pension system is also strong in its supervision and administration. This was the first Mercer Global Pension Index that assessed Finland in light of the pension reform that will come into effect in 2017.
The Mercer index globally assesses pension systems in terms of their adequacy, sustainability, and integrity. Finland ranked among the top 30 percent in all three categories, and got the best integrity index value for the second time already. The integrity index measures the reliability and transparency of pension system administration.
Mercer’s suggestions for improvement were the same as last year: minimum pension could be higher, the level of mandatory contributions that are set aside for the future could be raised, and the labour force participation rate at older ages could be improved.
The fourth target for improvement mentioned by Mercer was to introduce pension sharing. In Germany and the United States, for example, spouses have certain pension entitlements in the event of a divorce.