Three European countries dominated the annual survey conducted by the American consulting firm Mercer, which analyzes 47 different retirement systems worldwide. It is worth mentioning that the survey did not include the Greek pension system in its analysis.
The European countries at the top of the list, which have consistently stood out in the Mercer CFA Institute global index since 2021 were Iceland (average 84.6), the Netherlands (average 84.4), and Denmark (average 81.8). These three nations are considered to have the best pension systems.
“All three countries have substantial funds with defined contributions from employees and employers. They have mandatory or near-mandatory systems. These countries benefit from good economies of scale compared to more fragmented markets like the United Kingdom for professional pensions,” stated Eimear Walsh, Head of Mercer’s Investments and Wealth.
The Mercer Index consists of three subcategories that assess a pension system: adequacy, sustainability, and integrity.
As the survey notes, the primary goal of any pension system should be to provide sufficient income for retirees, essentially serving as a safety net. The ability of governments to create incentives for workers through income means to save for their retirement plays a significant role in evaluating the health of any system.
The design of the payment program is also crucial, according to Mercer’s ranking, assessing whether workers can continue to receive benefits when temporarily out of the workforce, for childcare or illness.
Portugal claimed the top spot in the evaluation of this criterion, with a score of 86.7 in Mercer’s latest report, thanks to its public pension system based on earnings.
The lowest score in Europe was Poland, ranking 31st globally with a score of 59.8.
Portugal was also crowned the best European country for retirement by the relocation company Moving to Spain. In a June report, it ranked European countries based on factors such as quality of life, beaches, safety, and housing prices.
In Greece, the main pension is comprised of two components, as per the European Commission: (a) the national pension which is not financed by contributions, but directly from the State budget, and (b) the contributory pension calculated based on earnings on which contributions have been paid from year 2002 until the month of application for a pension, and based on the replacement rate based on the total insurance period. It is granted every month.
As per the OECD, the pension age in Greece is 67 for both men and women with at least 4,500 days of contributions (equivalent to 15 years).
Workers with a contribution record of 12,000 working days (40 years) can retire with a full pension benefit at the age of 62.
There are concessions for people who work in arduous or unhygienic workplaces.
