Mercer CFA Institute Global Pension Index
Since 2009, the Mercer firm, the CFA Institute and the Monash Business School have published an annual study on retirement environments in various countries around the world. The most recent edition of this study is available free here.
It analyzes and compares the retirement environment of 39 countries covering nearly two-thirds of the world’s population. The authors measure more than 50 indicators which they group into 3 sub-indices: Adequacy, Sustainability and Integrity. We could translate these sub-indices as: Convenience, Sustainability and Integrity. It should be noted that this study was published in September 2020 and takes into account the new challenges brought by the COVID-19 pandemic.
How does Canada compare?
Here is the total score, out of 100, of the top-10 countries in this study:
Not surprisingly, the countries of northern Europe are well represented in this list. Canada still does well in 9e position.
How to improve the situation
Beyond the observation, the authors of the study also suggest possible solutions to improve the situation in each country.
For Canada, they propose the following avenues:
- Promote an increase in the number of participants in private pension plans;
- Allow an increase in the level of household savings while promoting the reduction of their indebtedness;
- Reduce the weight of government debt relative to GDP;
- Promote the improvement of the participation of older Canadians in the labor market.
In conclusion
Sometimes there is a tendency to question the structure of the retirement environment in Canada. Beyond the mechanics of this study, the fact of measuring the countries of the world on the same criteria seems very relevant.
Canada’s positioning recalls the old adage: When we look at each other we are sorry, when we compare we console ourselves!
Martin Dupras, a.s.a., Pl.Fin., M.Fisc, ASC
Fellow de l’IQPF
ConFor financiers inc.
Mars 2021
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