Image: AOP

An international study measuring retirement income systems of 34 different countries has ranked Finland as having the third-best in the world, behind the Netherlands and Denmark.

As in previous years, the tenth annual Melbourne Mercer Global Pension Index graded the pension systems of countries based on criteria such as the adequacy of pensions, the sustainability of pension systems and their administrative integrity.

Finland's position improved over its fifth place ranking last year due to changes in how the pension replacement rates were scored, according to the group.

Mikko Kautto from the Finnish Centre for Pensions said Finland lags behind the Netherlands and Denmark in terms of sustainability.

“They have much larger pension assets than we do. In addition, the prefunding of pensions there is much more extensive than in Finland.”

The report pointed out that Finland could raise its pension ranking by increasing minimum pension levels, strengthening the employment rate among older people and boosting the prefunding of pension assets.

“Minimum pensions have been falling in recent years following index cuts. And even though the employment rate for the over-60-year-olds has been rising, there is still room for improvement in this area too,” Kautto added.

Sweden ranked fifth and Norway sixth in the survey, while Argentina, Japan and India attained the lowest scores.