Israel Ranks Fifth Globally in Pension System Index
Translated & summarized from Ynet by baba
Israel's pension system ranked fifth globally in the 2026 Global Pension Index, earning an 'A' rating with a score of 81.9. The Netherlands retained its top position for the fourth year. The index assesses 55 countries on adequacy, sustainability, and integrity. Israel's score improved from the previous year, placing it among the top systems worldwide.
The story in 5 lines · by baba
- Israel's pension system ranked fifth globally in the 2026 Global Pension Index with an 'A' rating.
- The Netherlands secured the top position for the fourth consecutive year with a score of 85.8.
- The index evaluates 55 countries based on adequacy, sustainability, and integrity.
- Israel's overall score improved to 81.9 from 80.3 in the previous year.
- The report highlights demographic pressures as a major challenge for pension systems globally.
Israel's pension system has been ranked fifth globally in the 2026 Global Pension Index, compiled by consulting firm Mercer and the CFA Institute. The system received an 'A' rating, with an overall score of 81.9 out of 100, an improvement from last year's 80.3. The Netherlands secured the top spot for the fourth consecutive year with a score of 85.8. The index evaluates 55 countries based on adequacy, sustainability, and integrity.
Israel's score places it behind Singapore (82.0) and ahead of Australia (80.6). It is one of only six countries, alongside the Netherlands, Denmark, Iceland, Singapore, and Australia, to achieve an 'A' rating, signifying robust pensions, long-term stability, and high integrity. The report noted that half of the top-tier systems are now located outside of Europe.
The adequacy metric, worth 40% of the total score, assesses the basic income provided by the system and the net replacement rate, which is the proportion of pre-retirement income received post-retirement. Sustainability (35%) examines the system's future viability, considering pension coverage, asset accumulation, contribution rates, demographics, public pension expenditure, government debt, and economic growth. Integrity (25%) focuses on regulation, governance, saver protection, communication, and operational costs, with an emphasis on funded systems, particularly in the private sector.
The Netherlands' top ranking is attributed to its model, which combines a reliable public minimum pension with broad workplace coverage and significant invested assets. Conversely, the report highlights long-term vulnerabilities in several European pension systems, including those in Austria, Spain, and Italy, largely due to demographic pressures like an increasing ratio of retirees to workers.
Global policymakers are implementing various reforms. The Netherlands is transitioning to individual pension funds dependent on contributions and returns by 2028. Germany's Bundesbank President Joachim Nagel proposed linking retirement age to life expectancy starting in 2031. The UK's system is declining, dropping from tenth to fourteenth place, with recommendations including reducing household debt and expanding pension coverage, especially for the self-employed.
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