The Netherlands tops the global pension rankings even as it changes how its workplace pensions are calculated, according to the 2026 Marsh CFA Institute Global Pension Index. The country is moving from schemes that promised a set retirement benefit towards pensions based on contributions and investment returns. Lower interest rates had made those previous benefits harder to continue funding. Existing arrangements were also less suited to people changing employers or moving into self-employment.
Its reform, expected to be completed by 2028, shows how much adaptation is required even at the top of the 2026 Marsh CFA Institute Global Pension Index. Across the 55 systems assessed, longer lives and falling birth rates are making pension systems harder to sustain. This year, the index has adjusted its assessment accordingly, examining how much income pensions replace at age 80 alongside what is provided when someone first retires.
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The Ranking Leaders
The Netherlands leads the 2026 ranking, followed by Denmark and Iceland. Australia joins the A-grade group, bringing the number of systems in the highest category to six.
Their scores reflect a combination of the retirement benefits they provide and their capacity to sustain those benefits, supported by effective regulation and governance.
For instance, France scores slightly higher for adequacy, at 85.0 against Denmark’s 84.2. On sustainability, however, France scores 49.3 compared with Denmark’s 84.8, contributing to their very different overall positions.
The index assesses 55 retirement-income systems covering around two-thirds of the world’s population. Cyprus was not included in the assessment.
| Rank | Pension system | Score out of 100 | Grade |
| 1 | Netherlands | 85.8 | A |
| 2 | Denmark | 84.1 | A |
| 3 | Iceland | 84.0 | A |
| 4 | Singapore | 82.0 | A |
| 5 | Israel | 81.9 | A |
| 6 | Australia | 80.6 | A |
| 7 | Chile | 79.2 | B+ |
| 8 | Sweden | 78.8 | B+ |
| 9 | Finland | 77.6 | B+ |
| 10 | Norway | 77.0 | B+ |
More than 50 indicators contribute to the results. This includes adequacy accounting for 40% of the overall score, sustainability for 35%, and integrity, covering elements such as governance and member protection, for 25%.
The Netherlands, Denmark and Iceland receive A grades in each category. Their positions are close, though, which is the reason why the authors of the study caution against treating differences of less than two or three points as irrevocable evidence that one system performs better than another.
The Dutch example shows how different sources of retirement income can work together. A state pension provides a foundation for almost everyone with sufficient residency, while occupational pensions cover most employees through collective employer-based arrangements. A substantial pool of invested pension assets helps fund future payments.
Those strengths have required adjustments as working lives and financial situations have changed. The report describes how lower interest rates put pressure on Dutch pension funding, while the occupational arrangements became less suited to careers interrupted by employment changes or periods of self-employment.
The Netherlands is moving towards occupational pensions based on contributions and investment outcomes. The reform aims to improve portability and fairness while preserving collective arrangements, with the transition expected to finish by 2028.
For the first time, Australia joins the highest-rated group this year, moving from B+ to A. Its score rose from 77.6 to 80.6. Denmark moves above Iceland, while Chile overtakes Sweden and Finland.
Demographic Pressures
The report also examines the demographic pressures facing many of the participating countries in the ranking. Using 2023 data, it finds that 43 of the 55 systems had fertility rates below the population replacement level of 2.1 children per woman. In 23 systems, the rate was below 1.5.
Over time, lower fertility and longer lives increase the demands on arrangements that use current revenues or contributions to pay pensions. Accumulated savings provide another source of funding, although investment returns affect how much income those savings can deliver.
The report examines much broader pension coverage, including for the self-employed, and opportunities to remain in work longer. It also acknowledges that health and physically demanding occupations can limit how far working lives can extend access to adequate funds for quality life.
How Pensions Work In Cyprus
For someone approaching retirement in Cyprus, the pension they receive depends on their social insurance contribution record and when they start claiming. The normal pensionable age is set to 65. Eligibility requires at least 15 years in the scheme and sufficient paid contributions, along with further conditions based on the contribution record.
The statutory pension has two components. The basic pension reflects contributions and credited periods, with adjustments for qualifying dependants. The supplementary pension reflects accumulated earnings on which contributions were paid above the basic earnings threshold set by the government. The total therefore depends on contributions across someone’s working life, rather than simply being a percentage of the final salary.
For 2026, the published full basic pension is €529.82 a month for a beneficiary without dependants. The minimum statutory pension is €450.35, subject to entitlement conditions and any applicable early-retirement reduction. These figures are benchmarks, so an individual’s total statutory pension can include an additional supplementary amount.
Eligible contributors can start claiming at 63, but will be faced with penalties for early retirement. Under current rules, the pension is permanently reduced by 0.5% for every month claimed before 65, amounting to 12% for someone starting at 63. Statutory pensioners also receive a thirteenth instalment, proportionate to the pension paid during the year.
A separate social pension provides support for qualifying residents aged 65 or over who lack another pension entitlement, subject to residence conditions. Its published monthly amount for 2026 is €429.15.
The government’s proposed reform would change these arrangements. The government is targeting January 2027, subject to parliamentary approval. Reform of provident funds is being discussed separately.
