The focus on pensions in Great Britain is being revolutionised by the benchmark laid down by other countries such as Denmark, Sweden, The Netherlands, Switzerland, Canada and Australia according to the Melbourne Mercer Global Pension Index who used 40 different indicators across a number of different pension schemes to reach their final analysis and ratings. With the UK government making 'pension promotion' mandatory for all UK employers it is good to see that 'notes have been taken'.
Britain was rated a C+ along with the United States and Germany compared against the first grade A achiever - Denmark.
What's the benefit of this research?
The crux of it is that Britain’s pension system is currently experiencing mass change based on the innovations by countries like those mentioned above. Enrolling automatically was introduced in the last year for example. This had already been tried in Australasia with Australia enforcing an no opt-out policy against New Zealand who allow the opt-out scenario.
These case studies, arguably more advanced pension systems if the MMGPI is anything to go by, can help to modernise the pension situation in Britain.
In Britain, the mentality around retirement planning is found wanting with many citizens not even aware of what a pension is. You only have to look at the volumes of Google searches for the term "What is a pension?" to realise that some serious awareness needs to be raised about the subject matter.
The MMGPI gave Britain and the USA a thumbs up and said there were some good features of their pensions systems but to improve their long term sustainability and efficacy they would need to take heed of those A graders for best practice purposes.
Let's take a closer look at 'A grade student', Denmark who have made provisions to ensure that their retirement aged population are comfortable in their latter years with a suitable income to live the lifestyle they desire.
Denmark have one of the best pension systems in the World with a public basic pension programme, a supplementary pension benefit plus fully funded, compulsory private schemes, operated by large funds instead of individual firms.
The Danes were the first country awarded A grade status by MMGPI, knocking The Dutch from the top spot.
Overall, Denmark's pension scheme is summarised as a top class, robust retirement plan with great benefits that is well regulated and has a high level of integrity.
Danish pastries out, Danish pensions in!
What is a pension? is a question that should be on every young person's mind. Having a retirement fund means adequate and sensible planning and saving. There are many different pension options so you need to consider which is best for you. Fill in our free advice form to hear from professionals. It takes two minutes and could prepare you for life.
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