CFA Society Netherlands: Stronger pension systems worldwide

December 12, 2025

_{This column was originally written in Dutch. This is an English translation.}

The quality of pension systems worldwide is on the rise. The 2025 edition of the Mercer CFA Institute Global Pension Index gives higher ratings to pension systems in many countries. This year, the index also includes tips for government policy on pension investments.

By Alwin Oerlemans, Head of Product Management at APG Asset Management, and Rik Albrecht, director and chairman of the investment committee at various pension funds, lecturer at SPO and advisor at Roccade Advies. Both are members of the Advocacy Committee of CFA Society Netherlands.

In the 17th edition of the Mercer CFA Institute Global Pension Index, we see the Netherlands in first place, Iceland in second and Denmark in third. Together with Singapore and Israel, these countries have robust pension systems that offer good pension outcomes for participants (‘adequacy’), are sustainable in design (‘sustainability’) and score well on organisation, governance, transparency and costs (‘integrity’). The Netherlands scores well in all three areas, but wins on offering good pension outcomes.

Newcomer to the highest category in fourth place, Singapore, scores best globally on integrity. The study is becoming increasingly comprehensive, now covering 52 countries and 65% of the world's population. Several countries, including a number of emerging economies, have made great strides forward.

This year, the report focuses specifically on the influence of governments on pension fund investments. Most countries have regulations in place to ensure that investments are made within a clear framework and under supervision, such as the prudent person rule. This framework is intended to ensure that investments are made in a careful, expert and responsible manner, in the interests of pension scheme participants.

However, in many countries (40 out of 52), governments appear to impose additional restrictions. These may be limits on specific investment categories, such as equities, real estate or corporate securities. For example, Spain has a 30% limit on real estate and South Africa has a 15% limit on private equity. Some countries have limits on foreign investments, such as Brazil, which limits them to 10%. Countries with higher per capita income, more developed capital markets and more extensive supervision generally have fewer restrictions. Other regulations concern restrictions on lifecycles for individual investments, such as in South America, and restrictions on control in companies. Canada has recently adjusted its policy on the latter point. In addition, there are also indirect rules relating to relative performance, solvency or taxation. Current discussions concern investing more in private markets in one's own country, such as in the United Kingdom, Canada, Australia and Malaysia, and the implementation of responsible investment, such as in Japan and Sweden.

By setting out eight principles, the report offers guidance on how to achieve a more balanced government policy. The first four principles relate to the primary objective of pension funds to provide income to pensioners, safeguarding the fiduciary role, robust governance and providing access to a range of asset classes appropriate to the size and complexity of the pension providers. The other four principles deal more specifically with government restrictions and government policy that encourages investment in the home country without encroaching on the fiduciary role of pension funds. In addition, they concern cooperation between pension administrators and the government to remove barriers to investment in terms of scale or risk. One of the principles specifically states that governments should refrain from performance tests or cost caps for pension funds because of their undesirable influence on specific investments. Finally, another principle draws attention to the influence of pension funds on the national economy. These principles will enable countries to further improve their pension systems in the coming years.