The Netherlands boasts the best pension system in the world, according to a study by researchers from Mercer and Monash University. This success is largely attributed to the high participation rate, as many Dutch workers are required to contribute to their pension through mandatory savings plans tied to employment.
The study, which assessed nearly fifty countries, including Germany, France, the United Kingdom, the United States, Japan, China, and India, found that the Netherlands continues to lead the rankings. The country has consistently performed well in this area, thanks to a robust system where a significant portion of the population builds up pension savings through their jobs. This broad participation, combined with substantial pension benefits and strong regulatory frameworks, has made the Dutch system a global leader.
Researchers also highlighted the ongoing transition to a new pension model in the Netherlands, which offers greater individual choice in determining pension levels. The availability of advisory services to guide participants through these choices is viewed as another positive feature of the evolving system.
“Strong regulations and flexibility, such as the ability to choose when to start receiving benefits, contribute to a sustainable and reliable system,” said Marc Heemskerk, a pension expert at Mercer. He emphasized the strength of the Dutch system’s combination of the state pension (AOW) and employer-based supplementary pensions.
However, the study noted areas for improvement. There is a need for better provisions for individuals who do not build up a pension through work, such as those with disabilities or full-time caregivers. Additionally, the report flagged the high levels of personal debt among Dutch citizens as a concern.
Following the Netherlands, Finland, Iceland, Israel, and Singapore were ranked as having the next best pension systems. At the bottom of the list were countries like India, Argentina, Turkey, and South Africa.
