The Spanish pension system falls to 26th place in the Mercer Institute Global Pension index

MADRID, 11 Oct. (EUROPA PRESS) -

The Spanish pension system has dropped four positions this year compared to 2021 in the Mercer CFA Institute Global Pension Index (MCGPI), now occupying position number 26 out of a total of 44 pension systems analyzed.

The MCGPI is a collaborative research project between the consulting firm Mercer, the Monash Center for Financial Studies (MCFS) and the CFA Institute. The index compares 44 retirement systems, which represent 65% of the world total.

The study establishes a global ranking, using more than 50 indicators to assign a value to each of the three sub-indices according to their weight: sufficiency (40%), sustainability (35%) and integrity (25%).

In the case of the Spanish retirement system, the study indicates that the main challenge continues to be the sustainability of the public system in the medium and long term. This sub-index, that of sustainability, improves slightly, from 28.1 to 28.7 points, although it is still one of the lowest of the 44 countries analysed.

The other two sub-indices, integrity and sufficiency, also improved, raising the general index for Spain by three points, from 58.6 points in 2021 to 61.8 points in 2022. However, this increase does not translate in a better position than Spain in the ranking due to the fact that the general average of countries has also increased.

The index classifies Spain with the grade 'C', a good system with shortcomings and risks that must be addressed so that its effectiveness and long-term sustainability are not questioned.

In fact, to improve the value of the global index of the Spanish system, the study recommends providing greater support to individuals with low purchasing power and older age, increasing the coverage of workers in pension plans through affiliation or automatic registration, and increase the participation rate of the active population in the most advanced ages.

In its 14th edition, the Mercer CFA Institute Global Index once again places Iceland at the top of the ranking, with a score of 84.7 points, followed by the Netherlands (84.6 points) and Denmark (82 points). By contrast, Thailand has the lowest value (41.7 points) and Mexico is the country that has made the most progress compared to 2021 thanks to its pension reform.

For each sub-index, the systems with the highest values ​​were Iceland for sufficiency (85.8 points) and sustainability (83.8 points), and Finland for completeness (93.3 points). The lowest scores go to India for sufficiency (37.6 points), Austria for sustainability (22.7 points), and the Philippines for completeness (30 points).

This year's report warns that the current economic environment, with low wage growth, rising inflation and declining investment returns across many asset classes, poses a challenge to pension systems around the world.