Argentina would have the worst retirement system in the world, according to the Mercer CFA Institute

The Netherlands regained its title as the best pension system in the worldaccording to an annual global index, which warned that retirement around the world is under pressure like never before.

Iceland, which ranked first last year, was second in the ranking and Denmark was third. Israel was the only other country to earn an ‘A’ grade on the Mercer CFA Institute’s global pension index, which rates systems based on their adequacy, sustainability and integrity.

The Netherlands is currently reforming its pension program to change its collective structure to a more individual approach. However, the report says the system will continue to deliver good returns following the change, backed by a strong asset base and regulation.

However, pension systems in most countries are under pressure due to the aging of the population, the increase in public debt and high inflationwhile they must also face challenges such as the inclusion of workers from the collaborative economy, known as “gig”.

“The bottom line is that, around the world, people need to start taking care of themselves in retirement,” David Knox, senior partner at Mercer and lead author of the report, said in an interview. “We can no longer depend solely on social security or public pensions.”

Argentina was the worst ranked country among the 47 analyzed, while the US ranked 22nd, two lower than last year. Australia ranked 5th; the United Kingdom, 10; Japan, 30; and China, 35.

The decline in birth rates has put pressure on several economies and pension systems in the long term., according to the report, which has negatively affected the sustainability scores of countries such as Italy and Spain. The report also highlighted several Asian systems, such as China, Korea, Singapore and Japan, that have reportedly undertaken reforms to improve their scores in the past five years, it said.

Artificial intelligence has the potential to improve pension systems by leading to more efficient and better informed decision making, which could lead to a higher real return on investmentKnox said, adding that technology could also help people make long-term financial decisions.

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