FX.co ★ 10 countries with best and worst pension systems

Netherlands

The Netherlands takes the top spot among countries with the best pension systems. The pension income consists of a state pension with a fixed rate and a professional pension accrued under employment contracts. Experts believe that the current pension system can be improved by reducing the level of household debt and increasing the labor force.

Denmark

The second place in this rating belongs to Denmark. From 2012 to 2017, the country occupied the first line but gave in to the Netherlands. In 2019, the country was ranked first in the ratio of the minimum pension to the average salary. The Danish pension system can be even better if the government facilitates the savings of the population, reduces household debt, and raises the employment age for the pre-retirement population.

Australia

Australia occupies third place in the ranking of countries with the greatest pension schemes. The pension system is calculated by the payments from the state budget, as well as employer contributions. Analysts say that the country may enhance the existing system by raising the retirement age as life expectancy increases.

Finland

Finland is ranked fourth on this list. Pension income in the country consists of the state pension and pension payments accrued depending on the wage size. Some economists argue the pension system needs some improvement by raising the minimum pension for low-income people. At the same time, it may lead to a significant increase in the number of working pensioners.

Sweden

Sweden closes the top five countries with the most decent pension systems. In 1999, the country’s pension system went through considerable changes. The reformed system provides a minimum guaranteed pension and benefit accrued according to previous earnings. The Swedish pension system can be improved by increasing the retirement age.

Mexico

Mexico opens an anti-rating of countries with the least favorable pension systems. From 2019, all Mexicans at age of 68 receive the pension. Yet, many people still face problems due to the private pension funds that do not hurry to pay off the pension.

Philippines

The Philippines takes second place among countries with the worst pension systems. Pension payments in the country consist of a small basic pension and income deductions. Residents of the Philippines can receive a lifetime pension if they have made pension contributions for at least 120 months. Analysts say that the current pension system has the main drawback that can be illuminated if the government provides financial support to the most financially vulnerable older people. In addition, the country's officials may modernize the pension system by boosting the number of employees making pension contributions.

Turkey

Turkey is in third place on this list. Pensioners in Turkey receive a state pension that is calculated according to their previous income. At the same time, voluntary private pension schemes operating in the country are not widely spread. The pension system may be overhauled by increasing the minimum state pension for the poorest disabled citizens.

Argentina

Fourth place on the list of countries with the worst pension systems is occupied by Argentina. The size of a state pension depends on factors such as the accrued salary and the citizen's participation in voluntary pension schemes. If the government wants to enhance the pension system, it needs to raise the minimum pension and increase household savings.

Thailand

Thailand closes the lists of top five countries with poorly developed pension schemes. The current pension system provides a retirement pension and a number of payments from funds, including individual savings and other funds financed by employers. Thailand's pension scheme can be improved if the government gives more financial support to the poorest senior citizens and introduces a minimum level of mandatory contributions to the pension fund.