Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. PENSION FUNDS
October 17, 2023 02:25 PM

Marginal gains, looming pain for global pension funds – Mercer CFA

Douglas Appell
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Financial data
    Diego Thomazini/Getty

    Mercer CFA Institute's 15th annual global pension index ranking, released Oct. 17, reported a slight improvement in its combined ratings of more than 45 national retirement systems even as it warned of unprecedented pressures facing those systems worldwide.

    The institute — which grades retirement systems on three broad metrics: the adequacy of the income they provide in retirement, their ability to sustain those systems going forward and the regulatory robustness, or "integrity," of the systems — said the combined score for the roughly 50 subcriteria that make up those three pillars edged up to 63.1 from 63 the year before.

    Related Article
    Public pension plans help close wealth gap in U.S. – NIRS

    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.

    Related Articles
    U.K. DB funds' surplus grows 2.1% in July, 70.3% for year
    State pension funds with more exposure to private markets to lag in 2023 – report
    Recommended for You
    McClearn_ Sylvester_2024_750-main_i.jpg
    New York pension funds among those focusing more on alternatives with emerging, diverse managers
    Donald Trump speaking in the Rose Garden with two American flags behind him.
    U.K. pension funds signal shift away from U.S. assets amid policy unpredictability
    Stack of coins
    Canada, Netherlands pension plans spend twice what U.K. plans do on administrative services
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print