The Netherlands’ pension system has been ranked as the best in the world by the Melbourne Mercer Global Pensions Index for 2019. This is a second time in a row where the system got higher points this year when compared to last year.
Mercer ranked 37 different countries according to their adequacy, sustainability, and integrity. The Netherlands scores 88.3 points in integrity and is in the top three for the other two categories. They say it is better than other pension systems studied because of economic growth and better accessibility to work.
They also say that the country can improve on the sustainability front by encouraging retirees to work at an older age as the general life expectancy of the people increases.
But they said it could be higher if people started saving more and paid off their debts, reports NU.nl. It is the first of its kind to study the so-called “wealth effect” where people feel like they can spend more as their wealth starts to increase. They found a direct correlation between pension assets and an increase in wealth – as pension assets increase, people feel richer and are more likely to borrow.
Best in the world despite concerns in the country
Despite having concerns within the country about reducing the pension, the Dutch system is still ranked as the best in the world. “We are critical with each other, and that is also good because only then can you continue to guarantee quality. But sometimes it is good to cherish your blessings through this type of research and realise that we are doing very well worldwide,” says Marc Heemskerk, a pension expert at Mercer.
It was announced last week that the coverage ratio has fallen wherePensioenfonds ABP (National Civil Pension Fund), the largest pension fund in the Netherlands, saw a decrease in coverage from 95.3% to 91%. The third-largest fund, BpfBouw, also saw a decrease but is still at 108.1%, reports NU.nl.
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