Even so, David Knox, senior partner at Mercer as well as lead author of the report, in an executive summary of its findings, cited a number of reasons to be concerned about the future.
"Retirement income systems around the world are under pressure as never before," Knox wrote, citing demographic downtrends that threaten pay-as-you-go pension arrangements, the return of inflationary pressures, the challenges of bringing growing numbers of gig workers under the retirement savings safety net and the continued rise of defined contribution systems, which have yet to focus on the challenges of post-retirement income.
For the latest rankings, Mercer CFA extended coverage to the national retirement systems of Botswana, Croatia and Kazakhstan, bringing the total number of systems to 47, accounting for 64% of the world's population. Scores for those systems ranged from 85 for the Netherlands to 42.3 for Argentina.
The Netherlands displaced Iceland for the top spot, while Denmark and Israel maintained third and fourth, respectively, in the rankings.
The U.S., meanwhile, slipped to 22nd from 20th the year before, with the report citing a decline in the country's score for the integrity, or regulatory robustness, of its retirement system for the drop-off.
The U.S. system's combined score slipped to 63 from 63.9 the year before, while its integrity score dropped to 59.5 from 61.7.
That lower score for regulatory robustness was part a broader trend, following a review of Mercer CFA's integrity subindex during the year that resulted in additional criteria being taken into account, such as whether retirement systems have anti-bribery and corruption policies in place.
The combined integrity scores for the 47 systems reviewed dropped to 71.6 from 72.9 the year before, which served to offset marginal increases for adequacy, which rose to 66 from 65.7, and sustainability, which climbed to 53.7 from 53.
The broader scores of some Asia-Pacific countries continued to push higher in the rankings, with Singapore climbing to seventh from ninth the year before, on the back of an increased level of pension coverage reported by the Organization for Economic Cooperation and Development, while Australia edged up to fifth from sixth the year before, on the strength of that country's pending moves to boost mandatory contributions.
Other countries in Asia fared less well, with Malaysia in particular — which had been singled out the year before as a retirement system that had enjoyed notable improvement — suffering a sharp drop in its overall score to 56 from 63.1 the year before, it lowest since Malaysia's 2016 debut in the rankings. That decline reflected the government's decision to allow participants in Malaysia's national defined contribution system, the 1.08 trillion ringgit ($228.3 billion) Employees Provident Fund, Kuala Lumpur, to tap into their retirement savings a handful of times over the past three years to get through COVID-19-related economic struggles.
The latest report noted a sharp decline in the amount of pre-retirement income Malaysian's retirement savings would provide.
