The Dutch pension system is the best in the world...again!

The Dutch pension system is the best in the world...again!

The 2020 Melbourne Mercer and CFA Institute Global Pension Index has ranked the Dutch pension system as the best in the world for the third year in a row

The 2020 Global Pension Index

For the past 12 years, Mercer, a human resources consulting firm, has collaborated with the Chartered Financial Analyst (CFA) Institute to rank 39 pension systems from countries around the world - representing around two-thirds of the global population, using over 50 indicators. 

The indicators that each system is measured against are divided into three categories:

  • Adequacy (e.g. benefits, savings, government support, system design, growth assets)
  • Sustainability (e.g. government debt, economic growth, demography, total assets)
  • Integrity (e.g. regulation, governance, protection, communication, operating costs)

The scores for each category contribute to a country’s final aggregate score, however, each category is weighted differently (adequacy is worth 40 percent of the final score, sustainability 35 percent, and integrity 25 percent). 

The final score, as well as the scores for each category, are out of 100. The scores also correlate to a grade, ranging from A to E. To achieve an A grade, a country must score higher than 80 out of 100. 

The Netherlands’ pension system

This year, the Netherlands achieved an overall score of 82,6, securing the number one spot. This score is noticeably higher than the score the country achieved in 2019 (81,0) and in 2018 (80,3). The report states this increase is down to the fact that the minimum pension and net replacement rates have increased. 

The Netherlands performed well across the board, and achieved a first-place result in the adequacy category (81,5 out of 100). It also received good scores in the remaining two categories: 79,3 for sustainability, and 88,9 for integrity. 

In spite of the Netherlands’ high scores, the report does highlight aspects of the system in which there is room for improvement. The report states the overall score could be increased by raising the level of household saving and reducing the level of household debt, and increasing the labour force participation rate for older generations as the national life expectancy rises. 

The top 10 pension systems in the world

  1. The Netherlands - 82,6
  2. Denmark - 81,4
  3. Israel - 74,7
  4. Australia - 74,2
  5. Finland - 72,9
  6. Sweden - 71,2
  7. Singapore - 71,2
  8. Norway - 71,2
  9. Canada - 69,3
  10. New Zealand - 68,3

The countries that secured the bottom three places in the ranking are Turkey (42,7), Argentina (42,5), and Thailand (40,8). For the full report, visit the Mercer website

Victoria Séveno


Victoria Séveno

Victoria grew up in Amsterdam, before moving to the UK to study English and Related Literature at the University of York and completing her NCTJ course at the Press Association...

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Jan Wrampelmeyer 21:27 | 26 October 2020

It is always nice to see that the Dutch pension system is ranked highly. However, for expats and knowledge migrants this can give a false sense of security. Expats will often have a lower pension than average, because they have stayed in the Netherlands only for part of their life. To receive the full state benefits (AOW), you need to stay in the Netherlands for 50 years prior to your retirement. And also workplace-pensions are based on the number of years you contribute. Have a look at to learn more about how high your pension will be.