Mercer, a company within Marsh McLennan Group (NYSE: MMC), and CFA Institute have published the 17th edition of the annual Mercer CFA Institute Global Pension Index (MCGPI).
In 2025, the highest grade — A — was once again awarded to the pension systems of the Netherlands, Iceland, Denmark and Israel. For the first time, Singapore joined this group — and is now the only Asian country to hold an A rating.
Amid rising global uncertainty, the growing size of pension assets has increasingly led governments to seek ways to redirect part of this capital toward national priorities. This year’s Index examines the unexpected consequences of such government interventions and outlines eight guiding principles to help policymakers strike the right balance between safeguarding private pension participants and supporting strategic national objectives.
“As people live longer and labor markets evolve, governments are under pressure to reform pension systems,” said Christine Mahoney, Global Leader for Defined Benefit and Defined Contribution Plans at Mercer. “Pension reform is never simple. Carefully assessing the consequences is crucial, which is why employers, governments and plan providers all need to have a voice in shaping more flexible systems.”
Margaret Franklin, CFA, President and CEO of CFA Institute, added:
“Government policies — from taxation to investment mandates — profoundly influence how pension funds deploy capital. If pension funds are expected to serve national interests, the professional investment community must warn against unintended consequences. As the Index makes clear, the primary purpose of pensions must remain retirement income security, firmly rooted in fiduciary duty.”
Pension Funds Under Policy Pressure — Cooperation Beats Mandates
Governments have long shaped how private pension funds invest — either to protect retirees or encourage investment in domestic priorities. Countries including the UK, Canada, Australia and Malaysia have recently encouraged funds to back national infrastructure and innovation. Elsewhere, debates are intensifying over whether ESG factors should be mandated, even if they are not financially optimal.
“Pension systems with fewer restrictions tend to rank higher,” said Tim Jenkins, lead author of the report and Partner at Mercer. “Rather than imposing rigid requirements, governments should instead make investment options attractive, improve transparency and governance, and partner with the private sector to support both pension stability and economic growth.”
Poland: Slight Technical Improvement, Still Among the Weakest Systems
Krzysztof Nowak, CEO of Mercer Poland, commented:
“Poland’s score in the 2025 Index is 57 points, up marginally by 0.2 points versus 2024 — largely due to better macroeconomic forecasts, especially GDP growth. However, only six countries saw a decline this year, while many recorded strong improvements — meaning Poland’s relative position remains unchanged.”
Poland remains in Category C, with four categories ahead and only one below. This group also includes Japan, Italy, South Africa, Austria, South Korea and China, as well as countries such as Botswana and Namibia.
Poland ranks fourth within its group, ahead of Austria.
Countries scoring above 80 points receive an A grade — systems that provide strong benefits, are stable and demonstrate high integrity.
These include: Netherlands, Iceland, Denmark, Singapore (first time), and Israel.
What Poland Still Needs to Do
Mercer notes that Poland’s structural weaknesses have not changed for years. The key recommendations remain:
- Strengthen the capital-based pillar of the pension system (e.g. PPK, OFE, PPE)
- Increase household savings rates
- Boost labor participation among people aged 50+
Currently, most pensions in Poland are still paid by ZUS under a pay-as-you-go system, funded by current contributions and state subsidies, not accumulated savings — a structure at high long-term risk without deep reform.
Pensions Are Improving Globally — No System Declined in 2025
Notably, eight systems improved their Index score this year — none declined. This signals global progress in strengthening retirement income security, which is critical amid longer lifespans and falling birth rates.
