Name: Countries rethinking retirement systems
Uploaded: 2026-04-02T15:00:42.600Z
Duration: 6 min 7 s
Description: By 2050, there will be 52 people aged 65 and over for every 100 working-age adults, increasing pressure on pension systems worldwide. Governments are responding by reshaping retirement systems — from shifting investment strategies to improving long-term sustainability. But progress is uneven, and where you live could have a significant impact on your retirement security.

By 2050, there will be 52 people aged 65 and over for every 100 working-age adults, increasing pressure on pension systems worldwide. Governments are responding by reshaping retirement systems — from shifting investment strategies to improving long-term sustainability. But progress is uneven, and where you live could have a significant impact on your retirement security.

Countries worldwide are reevaluating their retirement systems in response to rapidly aging populations and shrinking workforces. The Mercer CFA Institute Global Pension Index compares 52 nations, revealing that countries like the Netherlands, Iceland, Denmark, and now Singapore, rank highest for pension security, while others face significant challenges due to informal labor markets and weak regulation.

Governments are increasingly encouraging pension funds to invest domestically and are working to balance benefit adequacy with long-term sustainability. Despite improvements, major gaps remain, particularly for the 2.1 billion people working in the informal sector who lack access to traditional retirement plans. The need for gradual reform and increased flexibility is emphasized as life expectancy rises globally.

Countries rethinking retirement systems

Where you live could determine whether you retire comfortably or not. And that matters more than ever, as people live longer and populations age rapidly around the world. By 2050, there will be 52 seniors aged 65 or older for every 100 working-age adults. The working-age population is expected to shrink by 13% over the next 40 years. This pace is unprecedented. Globally, people over 60 already outnumber children under 5. With fewer workers supporting more retirees, the strain on pension systems is only set to grow. And when you retire, how secure you are may depend largely on where you live. Different countries are in different places. What's affordable for one is not affordable for another. There are emerging markets. There are very traditional markets. We have some countries with a lot of aging and very low birth rates, whereas in other countries that isn't the case. The Mercer CFA Institute Global Pension Index compares retirement systems across 52 countries, covering about 65% of the world's population. Countries like the Netherlands, Iceland and Denmark continue to rank among the best. And for the first time, Singapore has joined them, becoming the first Asian system to earn an A-grade. Overall, systems are improving. But are they improving fast enough? We compare the systems on three different metrics. Firstly, on adequacy. Is there enough? Secondly, sustainability. Can I afford to give what I'm giving today, tomorrow? And thirdly, integrity. This is all about transparency. Can I trust what the system says and does? We have some systems that are provided by the government. Some are private. Some are a mixture. Many are a mixture. Singapore is a useful case study. It's already a super-aged society with one in four people expected to be over 65 by 2030. Its pension system, the Singapore Central Provident Fund, covers retirement, housing and healthcare. And it has been feeling the pressure. A decade or so ago, the public perception towards the CPF was quite negative. And so then the government has to extend quite a bit of effort to explain, to engage with the citizenry and even to make some changes to the CPF system. Trust and confidence in the system is very important. One of the best indicators of the trust and confidence is that the CPF members are voluntarily putting in monies in the CPF. Another key feature, gradual reform. These are very major long-term decisions and so it affects people for a long haul. It takes time for them to understand it and perhaps ask questions, engage and then try to apply it into their life. Around the world, pension systems are evolving in different ways. Governments are increasingly encouraging pension funds to invest at home, channeling retirement savings into national priorities like infrastructure, housing and economic growth. That debate is happening. It's been happening in Canada, UK, US, Australia. There is increasing global uncertainty. And in that world, national interests often come to the fore. Other countries are exploring similar approaches, from capital market reforms in South Korea to economic diversification efforts in Saudi Arabia. But investment strategy isn't just about geography. It's also about flexibility. There is an increasing amount of assets invested in each country in private pension funds. Nine of the top 12 systems in the index have the least amount of investment restrictions on how pension funds can invest. By giving free rein, it improves the retirement outcomes. One example is Australia. Its pension system, known as the superannuation fund, combines mandatory contributions with a relatively flexible investment approach. The super fund assets are now something like 140% of GDP, making it the fourth largest asset pool in the world. And that's despite Australia being a smaller economy than many. While governments are stepping up, pension systems still have major gaps to close. Around 2.1 billion people worldwide work in the informal economy, lacking access to social protection, income security or traditional retirement plans. That challenge hits hardest in countries already struggling with weaker pension infrastructure. There were four countries who have a degrade overall. These are systems with some major weaknesses, India, Argentina, the Philippines and Turkey. And some of that is very systemic issues, like there's often a very big informal working sector. People are not in formal employment. There's very little regulation for those private pension systems. Or if there is, it's not necessarily followed. There is a very limited preservation. So you can access money before retirement because people take money out before they get there. So it's not a retirement income system. It's a savings system instead. Even in stronger systems like Singapore's, new challenges are emerging. In more recent years, there's a lot of gig workers who work through various platforms. So government has been working with these platform providers to help the self-employed persons that they work with to contribute to their CPF as well. At the same time, countries are trying to balance generosity with sustainability. This is why the index doesn't look at adequacy without looking at sustainability. It's all very well in having the best gold-plated benefits provided today. But if in two years' time you can't afford to continue to deliver those, then actually confidence of the citizens changes. Increases in life expectancy, one of the biggest demographic changes in Singapore, in the whole world. We've got to help people envisage the future that people will be living longer.

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