Over half of the top 10 best pension systems in the world are European countries, with Denmark and the Netherlands leading the way in first and second place.

Denmark and the Netherlands were both voted as having the best pension systems in the world by the 2015 Melbourne Mercer Global Pension Index, both becoming the only two countries to have ever scored an ‘A’ grade for their pensions savings culture.

The Index ranked Denmark as the best system globally, with an overall score of 81.7 out of a possible 100, followed by the Netherlands with 80.5 – 80 being the score needed to earn an ‘A’ grade.

This can be compared to the UK, which narrowly missed a ‘C’ grade, by scoring a 65, which is the minimum score required to enter the ‘B’ grading bracket. Sweden, Switzerland and Finland however, hogged more comfortable places within the top 2-10 pension systems in the world scoring 74.2, 74.2 and 73 respectively.

Denmark's place at the top for the fourth consecutive year was attributed to its "well-funded pension system with good coverage, high level of assets and contributions, provision of adequate benefits and a private pension system with developed relations".

Scores were produced dependent on three different criteria: sustainability, integrity and adequacy. Based on these factors, Denmark scored the highest mark for sustainability, Finland for integrity and Australia for adequacy.

Mercer senior partner and author of the report David Knox said implementing the right reform to improve pension systems and provide financial security in retirement “has never been more critical for both individuals and societies”.

“The MMGPI is an important reference for policy makers around the world to learn from the most adequate and sustainable systems. We know there is no perfect system that can be applied universally, but there are many common features that can be shared for better outcomes," Knox said.

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