Canada’s retirement system ranks No. 17 out of 48 countries, down from No. 12 in 2023, according to a new report by Mercer and the CFA Institute.
The report analyzed retirement systems based on adequacy, sustainability and integrity. The top three systems remain unchanged from last year, with the Netherlands receiving the highest overall score (84.8 out of 100), followed by Iceland (83.4) and Denmark (81.6). India had the lowest overall score (44).
Read: Canada’s retirement system ranks No. 12 out of 47 countries but has room for improvement: report
Canada received an overall score of 68.4 — down slightly from 70.2 in 2023 — and was ranked No. 13 in terms of sustainability with a score of 63.8, No. 22 for integrity (77.1) and No. 24 for adequacy (67). The decrease in Canada’s overall score is attributed to decreases in the base pension (when expressed as a percentage of the average wage) and net pension replacement rates, following an increase in the average wage published by the Organisation for Economic Co-operation and Development.
The report suggested several measures for strengthening Canada’s retirement system, including increasing the coverage of private sector employees through the development of an attractive product for those without an employer-sponsored pension; introducing a minimum access age for all pension products; increasing the level of household savings and reducing the level of household debt; and reducing government debt as a percentage of gross domestic product.
“In a world where fertility rates are falling and life expectancy is rising, retirement income systems are centre stage,” commented Pat Tomlinson, Mercer’s president and chief executive officer, in a press release. “Ensuring strong alignment in private and public retirement income arrangements, increasing employee coverage and encouraging higher labour force participation for those who wish to work at older ages are just a few ways to improve long-term outcomes for retirees.”
Read: Canada’s retirement system remains strong, but DC pension plans facing inflation risks: report