Countries with Top Pension Systems for Retirement Immigration

The latest survey taken by Mercer CFA Institute indicates that Iceland is your top choice in terms of a pension system. If you feel like spending your golden years in retirement with merit, dignity, and self-respect, definitely move to Iceland. You may use Global Pension Index 2021 to pick a country you should immigrate to in order to become a happy-go-lucky retiree.

Our experts will be happy to provide you with legal assistance you may need to secure yourself a happy future as an immigrant in retirement at a touch of a button. We are ready to lend you a hand when you are not sure where to immigrate and what retirement immigration program to choose. We will take care of your documents, prepare and submit your visa and residence permit applications, and open bank accounts abroad for you.

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Global Pension Index 2021

Millions of people in all corners of the world retire every year. The quality of state retirement plans however is still very different across the globe, even though the world population gets older, the current COVID-19 pandemic is picking up its pace and the number of retirees keeps growing ever-more-rapidly. What countries invested in reliable state retirement plans, and what states are lagging behind? Mercer and CFA Institute studied this issue quite thoroughly and are ready to come up with the answer you need.

The Global Pension Index is a joint research project. It is sponsored by CFA Institute, a global association of investment experts, with the support of Monash Center for Financial Studies (MCFS), that makes a part of Monash Business School, and Mercer, a world leader in financial research. The latter also rethinks lots of trite labor industry concepts and brings new life to pension and investment research.

The Global Pension Index (MCGPI) is basically a study of global pension systems used by at least two thirds of the world’s population simultaneously. It makes a comparative analysis of various pension systems, reveals their flaws and suggests what reforms should be put in place to secure high pensions to the retirees. 

Top 3 A-rated systems are stable and well-regulated. They yield significant profit to certain citizens in retirement.

According to Margaret Franklin, CEO and President of the CFA Institute, the following is true:

“Today, it is evermore crucial to realize how we can make pension systems more effective and increase retirement benefits. The pandemic made social and economic inequality in many corners of the world ever more pronounced.  The situation in terms of long-term investments is worsened by the gender gap in social security system. The latter is the source of extra immediate concerns, as women generally receive smaller retirement benefits. Whether we can promise retirement benefits ample for people’s needs depends on politicians and is also up to those concerned parties in the industry, that take collective measures to study both strengths and weaknesses of pension systems. The ultimate goal here is to improve the system and increase retirement benefits for every retiree”. 

David Knox, a senior partner at Mercer and a lead author in the research, agrees with this. He adds that immediate action is necessary to improve the performance of the whole industry.

“Global reaction of the world governments to COVID-19 was to provide major economic incentives to those in need. The goal was achieved through the increase of national debt and the reduction of potential to support the elderly. Retirement programs on a global scale tend to become more like savings schemes and not the traditional retirement plans with their fixed benefits. The time is not right today to hinder or postpone the pension reform. Quite the other way around, it is high time to speed it up. People nowadays become increasingly more liable for their pension income and this sphere has to be tightly monitored and managed, while people themselves need care and support”, Doctor Knox said.

Retirement packages for men and women – what are the differences?

Gender differences in pension benefits of men and women vary significantly across the globe. Yet, the analysis of Global Pension Index 2021 indicates that the reason behind this difference is by far not the one and only.

“It is an utmost challenge to close this gender gap in retirement benefits. Even more so, that pension income is closely related to employment and income structure. We need to remember that elderly women typically suffer from poverty a lot more often than elderly men. This is why we dare not let the grass grow under our feet”, Doctor Knox declared.

Governments may take quite a number of measures to help those in retirement. They should lift restrictions and let respective individuals be parties to employment related pension agreements, for one thing. It shall be possible for employees to participate in pension plans that secure adequate benefits for them, regardless of their income, salary, or employment length.

Pension funds may also offer loans to carers who tend to the elderly and the little ones. Carers do a great favor to the society, and it is irrational to punish them in their later years for lack of official employment. 

Retirement plan ratings as measured by Global Pension Index 2021

Pension systems are unique in each country, and no direct comparison is possible. Retirement experts however consider certain system elements to be universal and unconditionally positive. It is not surprising that they typically promote an enhanced financial support for the elderly and people in retirement in general.

Like in case with all the previous ratings, Mercer and CFA Institute grouped these universal elements into 3 sub-indices:

  • The adequacy sub-index: basic level of income and structure of the region’s private pension system.
  • The sustainability sub-index: retirement age, advance state funding level, and national debt level.
  • The integrity sub-index: adoption of new rules and management regulations to protect the plan members.

The said 3 indicators are used to rank pension systems in 43 different countries that account for 65% of the world population. This year, 4 new countries were included into the index. We are talking here about Iceland, Taiwan, UAE and Uruguay.

Leading global pension systems

Based on the study findings, Iceland, Netherlands and Denmark are the happy owners of the most effective pension systems in the world. Each of them will achieve an “A” rating in 2021.

None of the systems scored below 35. The score between 35 and 50 puts the system into “D” category. These systems are characterized by grave faults and major flaws. A certain pension system may be categorized as a system belonging to “D” category even at the very early stages of its development.

Here are the ratings of various countries in Global Pension Index.

АAbove 80Netherlands
A stable high-class pension system that secures good benefits. It is also stable and reliable.
A well-structured system with lots of useful functions that also has areas in need of improvement. These areas distinguish it from “A” category systems.
United Kingdom
New Zealand
Hong Kong
A system with several good functions that also has serious inherent risks and faults, and they need to be addressed. In the absence of the necessary improvements, system efficiency and long-term stability cause serious doubts.
Saudi Arabia
South Africa
D Japan
South Korea
A system with several positive traits that also has serious faults, and they need to be addressed. In the absence of the said improvements system efficiency and stability cause serious doubts.

The pension system of Iceland ranks high in all 3 sub-indices. The country offers a state pension which consists of 2 components. They are mandatory pension contributions for both employees and employers and non-mandatory contributions to state approved pension products.

Pension contribution rates are rather high in Iceland. This results in large state pensions that people in retirement here may enjoy. Pension gender gap is relatively low in Iceland. This means that the difference between pensions men and women receive in retirement is basically insignificant, particularly when compared with the other ОECD countries. 

Does this mean that Iceland is your top retirement immigration choice? We do not recommend settling here because of the harsh local climate. You should consider warmer countries that rank number 2 and 3: Netherlands and Denmark.

Israel that comes fourth is a rather appealing country for your retirement, with its warm climate and the right to repatriate for those having Jewish roots.

Philippines, Argentina, and Thailand with their lowest ratings are on the opposite end of this retirement spectrum.

The adequacy rating of Thailand is especially low, just 35.2. Thailand could increase minimum benefits for its poorest and involve a higher number of employees in its occupational pension plans to increase its retirement ratings.

Russia is not a participant of this rating, which is hardly surprising. Let’s not forget that the average pension in the country is below EUR 200. The prospects are also hardly bright. Depopulation, economic stagnation, and high inflation starting this year are not encouraging and do not leave much hope for a better future.

Ways to improve retirement plans

The index suggests that its member countries constantly improve their pension systems. The average general index grew by 1.0 since 2020 till 2021.

The fact that the average index makes up 60.7, indicates that pension systems of most countries have some good parameters and at the same time some distinctive flaws. Here’s what should be done to get rid of them:

  • Increase adequacy due to higher coverage and higher employee participation in private pension systems.
  • Increase sustainability due to retirement age adjustment, taking into account increased life expectancy and promotion of higher involvement of the elderly in the workforce.
  • Increase integrity by giving effect to the policy that reduces retirement gender gap and inequality between the minorities.

The countries that implement at least some of these changes will be essential for the next generation of people in retirement. If these countries have no such plans, they may face problems in the near future.

Delayed effects of Covid-19 for many years to come

Widespread economic effects of COVID-19 mount the pressure that people in retirement may experience, both now and in the future. COVID-19, backed up by increased life expectancy and stress on country resources, that are used to support health and well-being of the aging population in retirement, increases vulnerability of the retirees.

COVID-19 affected by far not just the society’s heath. Long-term economic effects influence industry brunches, interest rates, investment returns and public confidence in the future. 

As a result of earlier retirement due to decreased employment opportunities or longer pandemic effects for one’s personal life, pension plan assets may experience slowdown in growth, while insurance contributions may increase.  

Top choice countries for your retirement

We suggest that current retirees who are choosing a warm country with high living standards for their  immigration consider the following 2 EU countries.


You may retire in Greece if you have enough money to invest in the country’s economy. Greece has been offering economic residence to investors for 8 years already. Such type of residence gives the right to permanently reside in the country to any investor that purchases local real estate for at least EUR 250,000. Your residence permit may be renewed in 5 years, provided you remain the holder of your investments. In 7 years, you’ll be authorized to apply for citizenship in Greece.

Wishing to raise the attractiveness of the offer, the Greek Ministry of Finance suggested a fixed 7% tax rate for those foreign citizens who are willing to change their tax residence (tax jurisdiction) and pursue a happy retirement in Greece. Any pensions, rental income and any other investments of theirs are taxed in Greece at the tax rate of just 7% for as long as 10 years. This is certainly profitable, as tax rates in our countries normally start from 18% 

You don’t have to invest into local real estate to enjoy the preferential tax rate. In this case, however, you won’t get a residence permit in Greece. The overall goal of the government here is to bring in foreign investments. Any person interested in paying a fixed tax in Greece may use this opportunity regardless of their age. To receive this right, the applicant shall pay no taxes in Greece within the last 5 years. A second requirement is that the country you transfer your tax residence from shall already have a corresponding tax agreement with Greece in place.

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Here you can get more information as to how to get a Residence Permit in Greece for financially independent individuals.


Portugal is known for its Economic Residence Program that offers tax benefits to bring foreign citizens to the country. Any immigrants investing at least EUR 500,000 into real estate in Portugal will get their residence permit for 2 years, both for themselves and their first-degree relatives. Economic Residence Program embraces tax exemptions for most foreign income, including pensions, dividends and property investments, for as long as 10 years. You may renew your visa every 24 months if you spend at least 2 weeks in the country within this period.

Portugal passive income visa (or D7 Visa) is another excellent option for both retirees and part-time retirees. This popular residence program offers an opportunity to become a non-standard resident (and receive the said tax benefits) and to actually work in Portugal as a digital nomad or be employed by a Portuguese company. D7 Visa grants you access to the country’s extensive healthcare system. Its validity period makes up 2 years, and the visa in question may be extended for 3 more years. In 5 years, you’ll receive the right to apply for a citizenship in Portugal.

Age limitations for D7 applicants do not exist. Yet, you need to demonstrate an annual passive income of at least USD 9,194 (plus USD 4,345 per each adult and USD 2,606 per each dependent), This is in line with the current minimum wage in the country. To qualify for an economic citizenship, you need to pay no taxes in Portugal for the last 5 years.

Our experts will gladly assist you with any requests regarding immigration. Just email us at to get the information you need.

What is Global Pension Index Developed by Mercer and CFA Institute?

Global Pension Index (MCGPI) is a study of pension systems used by two thirds of the world population at the same time. It makes a benchmarking assessment of pension systems, discovers certain faults of theirs, and suggests what areas require modernization so that pension benefits may be higher. Top 3 A-rated systems are stable and well-managed. They provide significant benefits to some citizens. Mercer and CFA Institute are known as the authors of this index.

What parameters are used to assess global pension systems included in MCGPI rating?

Each pension system is unique in its own way, so direct comparisons are hardly possible. Certain elements are nevertheless considered to be universally positive and promoting a better financial future for both the elderly and people in retirement.
As in the case with the previous ratings, Mercer and CFA Institute grouped these 3 unique elements into 3 sub-indices:
The adequacy sub-index: basic level of income and structure of the region’s private pension system.
The sustainability sub-index: retirement age, advance state funding level, and national debt level.
The integrity sub-index: adoption of new rules and management regulations to protect the scheme members.

What country has the best pension system in the world?

The study carried out by Mercer and CFA Institute proves that in 2021 Iceland, the Netherlands and Denmark had the best pension systems on a global scale. Iceland took the first place, followed by the Netherlands and Denmark. Their pension systems scored above 80 and this indicates a happy future for those in retirement. Israel that came fourth is an attractive warm country for your retirement as well. Russia wasn’t included in the rating, and this is hardly surprising for a country with an average pension of EUR 200. Its prospects are rather gloomy as well, and the people will soon face depopulation, economic stagnation, and high inflation starting this year.

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