The Federation of European Independent Financial Advisers

Few financial decisions are as important to an expat as the question of how and where they invest into a pension scheme.

This is why the Melbourne Mercer Global Pension Index is so useful in terms of assessing the adequacy, sustainability and integrity of different nations’ pension systems. The 10th edition of the index was recently published and makes for interesting reading from an expat pension perspective.

The top spot in the list of 34 national pension systems was gained by the Netherlands having scored 80.3 – just a tenth of a point ahead of last year’s winner, Denmark.

This put the two nations way ahead of the average score of 60.5 and, of course, of the last placed nation, Argentina, which scored only 39.2.

David Knox, who authored the Mercer report said it highlighted the difficulty in finding a balance between “what you offer and how long you can offer it”.

This is certainly true of most nations’ mainstream private pensions, with many predicting that they will struggle to maintain the balance over the long-term in the face of ageing populations and other economic pressures.

Italy, Austria and Spain — all of which scored high for adequacy but low for sustainability – are among the nations most likely to feel the pressure soon.

The study defined “adequacy” as being based on the level of tax flexibility, benefits, growth assets, system design and savings provided by a pension. “Sustainability” was defined on the basis of factors such as coverage, contributions, growth and debt. “Integrity” was defined on the basis of measures including regulation, costs, governance, protection and communication.

And this is not the first time that the Netherlands has topped the list – it ranked no. 1 seven years ago.

The Melbourne Mercer Global Pension Index is published by the Australian Centre for Financial Studies in collaboration with Mercer and the State Government of Victoria. The UK’s pension system was ranked in 15th place.

​​​​​​​​​The above article was kindly provided by Blacktower Financial Management Group and originally posted at: ​​​​​​​​​​​https://www.blacktowerfm.com/news/643-expat-pensions-netherlands/