The 10th annual Melbourne Mercer Global Pension Index report on the adequacy and sustainability of national pension systems, released Monday, warns of growing challenges in balancing those twin goals as the Baby Boom generation retires.
The Netherlands took the top spot in the latest rankings — measuring 34 national pension systems for adequacy, sustainability and public trust — with a score of 80.3, edging out last year's leader, Denmark, at 80.2. At the other end of the spectrum, Argentina's pension system ranked 34th with a score of 39.2.
While the average score for all the measured systems edged up to 60.5 from 59.9, the report didn't accentuate the positive.
The tension between "what you offer and how long you can offer it" is growing as more baby boomers enter retirement, and the latest results should serve as a "wake-up call," said David Knox, author of Monday's report and a senior partner at Mercer Australia, in an interview.
While a number of national pension systems provide decent retirement benefits now, many will struggle to maintain those benefit levels over the long term, Mr. Knox predicted.
He cited Italy, Austria and Spain — with relatively high adequacy scores of 67 or 68 but sustainability rates of between 20 and 28 — as examples of countries that could "hit the pressure point" relatively soon.