2021年全球养老金指数（英）-97正式版

MercerCFAInstituteGlobalPensionIndexPensionreforminchallengingtimesMercerCFAInstituteGlobalPensionIndex2021iiContentsMercerpreface1CFAInstitutepreface201/Executivesummary302/BackgroundtotheIndex903/Changesfrom2020to20211404/Genderdifferencesinpensionoutcomes1705/Abriefreviewofeachsystem2606/Theadequacysub-index5007/Thesustainabilitysub-index6108/Theintegritysub-index72Referencesandattachments82MercerCFAInstituteGlobalPensionIndex20211MercerprefaceTheimpactoftheCOVID-19pandemiccontinuestoaffectthewell-beingofmillionsofindividualsaroundtheworld.Itseffects,however,arenotconfinedtothehealthsystemsorthosewhocontractthevirus.Therearebroadereconomiceffectswithhighergovernmentdebtandrestrictedeconomicactivityinmanycountries.Whileitwouldbeeasyforgovernmentstoconcentrateontheseshorttermchallenges,itwouldbeamistaketodoso.Withageingpopulations,lowornegativeinterestratesforlonger,anduncertaininvestmentreturnsinthefuture,thefinancialwellbeingofourfutureretireescannotbelefttochance.Itmustbeconsiderednow,leadingtoourrecommendationsforurgentlong-termpensionreforminthesechallengingtimes.Manyofthechallengesaresimilararoundtheworld,irrespectiveofsocial,political,historicaloreconomicinfluences.Further,thepolicyreformsneededtorespondtothesechallengesarealsosimilar.Theyrelateto:•••••benefitlevelspensioncoverageThe2021MercerCFAInstituteGlobalPensionIndexcompares43retirementincomesystemsfromaroundtheworldandcompareseachsysteminrespectofadequacy,sustainabilityandintegrity.Or,toputitanotherway:retirementagesencouragingpeopletoworkalittlelongerincreasingtheleveloffundingsetasideforretirement••Whatbenefitsarefutureretireeslikelytoreceive?••benefitdesigntoreduceleakagebeforeretirementandCantheexistingsystemscontinuetodeliver,notwithstandingthedemographicandeconomicpressures?thedevelopmentofappropriateretirementincomeproducts,particularlywiththegrowingimportanceofdefinedcontributionarrangements.•Arethesystemswellgovernedtoencouragelong-termcommunityconfidence?However,thesenecessaryreformsarenotalwaysstraightforwardandsomemayrequirelongtransitionperiods.FournewsystemshavebeenaddedtotheIndexthisyear,namelyIceland,ChinaTaiwan,UAEandUruguay.InitsfirstappearanceintheIndex,IcelandhasjustpippedtheNetherlandstoreceivethehighestindexvalue.SowhatarethefeaturesoftheIcelandicsystemthatgeneratesthisresult?Theyinclude:IamdelightedtorecognisetheCFAInstituteasourmajorsponsorandsincerelythankthemfortheirenthusiasmandparticipation.TheIndexisarealpartnershipbetweentworespectedglobalorganisations.••Arelativelygenerousstatepension;IwouldalsoliketothanktheMonashCentreforFinancialStudieswithinMonashUniversityfortheircontinuedinvolvement,particularlyinestablishinganAdvisoryBoardofseniorandexperiencedpensionexpertswhohaveprovidedinsightfulcomments.Aprivatepensionsystemthatcoversallemployeeswithahighcontributionratethatleadstosignificantassetsbeingsetasideforthefuture;and•Awell-governedandregulatedprivatepensionsystemthathasgooddesignfeatures.Finally,weareverygratefultotheMercerconsultantsaroundtheworldwhohavebeeninvaluableinprovidinginformationinrespectoftheirretirementincomesystemsandcheckingourinterpretationofthedata.WealsoappreciatethesupportoftheFinnishCentreforPensionsandtheIcelandicPensionFundsAssociation.Thisyear’sreportalsoconsidersthegenderdifferencesinpensionoutcomesthatexistineveryretirementincomesystem.Thecausesaremanyandvariedandtheimpactsdifferconsiderablybetweensystems.Neverthelessitisclearthattheaveragefemalepensionislower,andinsomesituationsmuchlower,thantheaveragemalepension.Suchanoutcomeisnotfairandmustbeaddressed.Thereportmakesseveralrecommendationsforemployers,thepensionindustryandgovernmentstoconsiderwiththegoalofreducingthegenderpensiongapinthefuture.Wehopeyouenjoyreadingthisreportandthatitcontinuestoencouragepensionreformtoimprovetheprovisionoffinancialsecurityforallretirees.Theprimaryobjectiveoftheresearchcoveredbythisreportistobenchmarkeachretirementincomesystemusingmorethan50indicators.Animportantsecondarypurposeistohighlightsomeshortcomingsineachsystemandtosuggestpossibleareasofreformthatwouldprovidemoreadequateretirementbenefits,increasedsustainabilityandagreatercommunitytrustinthepensionsystem.DrDavidKnoxSeniorPartnerMercerMercerCFAInstituteGlobalPensionIndex20212CFAInstituteprefaceCFAInstituteishonoredtosponsortheMercerCFAInstituteGlobalPensionIndexandtoagaincollaboratewithMercerandtheMonashCentreforFinancialStudiestocontinuetheimportantworkofdevelopmentanddistributionofthisresearch.AtCFAInstitute,ourmissionistoleadtheinvestmentprofessiongloballybypromotingthehigheststandardsofethics,education,andprofessionalexcellencefortheultimatebenefitofsociety.Inparticular,theclosingwords–“theultimatebenefitofsociety”–speakdirectlytoourdesiretoincreasethepositivereal-worldimpactofinvestmentmanagement.Retirementsystemsthatmeettheadequacy,sustainability,andintegritystandardsoftheindexcontributetothehealthofthefinancialsystem.Pensionplansfaceextraordinarychallengesduetohistoricallylowinterestratesandinsomecasesnegativeyields.Akaleidoscopeofassetclasseswillberequiredtoaddresstheseconcernsinordertoultimatelydeliverreturnsfortheendbeneficiaries.Wemust,asinvestmentprofessionals,leadtheeffortforgreaterretirementsecurityforindividuals.Wemustworktogetherwithpublicauthoritiestoevaluatethestatusofpensionplansintheirjurisdictions,challengethestatusquowherenecessary,andrebuildtrustinpensionsacrosstheglobethroughthebettermentofthesesystems.WeatCFAInstituteseektoshapethefutureoftheinvestmentindustryandtheprofession,whichincludesadvocatingforthestructuralresilienceofcapitalmarkets.Pensionsystemsandretirementplansareimportantbuildingblocksofmarketresilienceacrosstheglobe.WeextendourdeepgratitudetoDr.DavidKnoxofMercerandtheentireMercerteamwhohavededicatedtimeandresourcestothisimportantresearch,aswellastheMonashCentreforFinancialStudiesfortheiroversight,whichensurestheintegrityoftheIndexeachyear.Pensionfundreformwillbeanongoingsocietalchallenge,andweareconfidentthattheMercerCFAInstitutePensionFundIndexwillhelptocatalyzeimportantconversationsandactioninthemonthsandyearstocome.Thisyear’sindexincludesanadditionalfocusonatimelyandrelevantissue:thegenderpensionspaygap.Thisgaprepresentsacriticalchallengethatwemustworkquicklytoaddresssincewomenaremorelikelytofacetheirretirementyearswithfewerbenefitsthantheirmalecounterparts.Theinclusionofwomenintheretirementdiscussioncannotandshouldnotbeoverlooked.Analysisandunderstandingofdataandtrends,andinformedrecommendationsbaseduponthosefindings,willshapehowtheleadersofeachpensionsystemincludedintheindexcanimprovetheeffectivenessandsustainabilityoftheirindividualsystem.Thisinformationwillfosterimportantdialogueabouthowpensionsystemscompare,andwaystoimplementfindingsfromonepensionsystemtoimproveanother.MargaretFranklin,CFAPresidentandCEOCFAInstituteMercerCFAInstituteGlobalPensionIndex2021Executivesummary|301/ExecutiveSummaryTheprovisionoffinancialDuring2020and2021,manyoftheseissueswereaccentuatedbytheCOVID-19pandemic.But,itisnotonlyageingpopulationsandtheeffectsofthecoronavirusthatrepresentchallengesforpensionsystemsaroundtheworld.Thecurrenteconomicenvironmentwithreducedwagegrowth,historicallylowinterestratesandreducedinvestmentreturnsinmanyassetclasses,areplacingadditionalfinancialpressuresonexistingretirementincomesystems.securityinretirementiscriticalforbothindividualsandsocietiesasmostcountriesarenowgrapplingwiththesocial,economicandfinancialeffectsofageingpopulations.Now,morethaneverbefore,itisimportanttounderstandthefeaturesofthebetterpensionsystems.Yet,acomparisonofthedifferentpensionsystemsaroundtheworldisnotstraightforward.AstheOECD(2019a)comments:“Retirement-incomeregimesarediverseandofteninvolveanumberofdifferentprogrammes.”11OECD(2019a),p132.MercerCFAInstituteGlobalPensionIndex2021Executivesummary|4Anycomparisonofsystemsislikelytobecontroversialaseachsystemhasevolvedfromparticulareconomic,social,cultural,politicalandhistoricalcircumstances.Thismeansthereisnosinglesystemthatcanbetransplantedfromonecountryandapplied,withoutchange,toanothercountry.However,therearecertainfeaturesandcharacteristicsacrosstherangeofsystemsthatarelikelytoleadtoimprovedfinancialbenefitsfortheoldermembersofsociety,anincreasedlikelihoodoffuturesustainabilityofthesystem,andagreaterlevelofcommunitytrustandconfidence.Withthesedesirableoutcomesinmind,theMercerCFAInstituteGlobalPensionIndex(theIndex)usesthreesub-indices–adequacy,sustainabilityandintegrity–tomeasureeachretirementincomesystemagainstmorethan50indicators.Thefollowingdiagramhighlightssomeofthetopicscoveredineachsub-index.Figure1:CalculatingtheMercerCFAInstituteGlobalPensionIndexCalculatingtheMercerCFAInstituteGlobalPensionIndex`

Benefits`

Pensioncoverage`

Totalassets`

Regulation`

Systemdesign`

Savings`

Governance`

Protection`

Demography`

Governmentsupport`

Homeownership`

Growthassets`

Publicexpenditure`

Governmentdebt`

Economicgrowth`

Communication`

OperatingcostsAdequacySustainabilityIntegrity40%35%25%MercerCFAInstituteGlobalPensionIndexTheoverallindexvalueforeachsystemrepresentstheweightedaverageofthethreesub-indices.Theweightingsusedare40percentfortheadequacysub-index,35percentforthesustainabilitysub-indexand25percentfortheintegritysub-index,allofwhichhaveremainedunchangedsincethefirstIndexin2009.thatthecurrentsystemisabletoprovidebenefitsinthefuture.Theintegritysub-indexincludesmanylegislativerequirementsthatinfluencetheoverallgovernanceandoperationsofthesystemwhichaffectthelevelofconfidencethatcitizenshaveintheirsystem.Thisstudyof43retirementincomesystems,representingmorethan65percentoftheworld’spopulation,showsthereisgreatdiversitybetweenthesystemsaroundtheworldwithscoresrangingfrom40.6forThailandto84.2forIceland.Thedifferentweightingsareusedtoreflecttheprimaryimportanceoftheadequacysub-indexwhichrepresentsthebenefitsthatarebeingprovidedtogetherwithsomeimportantsystemdesignfeatures.Thesustainabilitysub-indexhasafocusonthefutureandmeasuresvariousindicatorswhichwillinfluencethelikelihoodMercerCFAInstituteGlobalPensionIndex2021Executivesummary|5Thisyear'sresultsThisstudyshowsthatIceland,theNetherlandsandDenmarkhavethebestsystems,eachreceivinganA-gradein2021.NoneofthesesystemshasanE-gradesystem,whichwouldberepresentedbyanindexvaluebelow35.Ascorebetween35and50,representingaD-gradesystem,indicatesasystemthathassomesoundfeaturesbuttherealsoexistmajoromissionsorweaknesses.AD-gradeclassificationmayalsooccurintherelativelyearlystagesofthedevelopmentofaparticularretirementincomesystem.Table1:Sumaryof2021resultsGradeIndexValueSystemsDescriptionA>80IcelandNetherlandsDenmarkAfirstclassandrobustretirementincomesystemthatdeliversgoodbenefits,issustainableandhasahighlevelofintegrity.B+75-8065-75IsraelNorwayAustraliaFinlandSwedenUKAsystemthathasasoundstructure,withmanygoodfeatures,buthassomeareasforimprovementthatdifferentiatesitfromanA-gradesystem.SingaporeSwitzerlandCanadaIrelandGermanyNewZealandChileC+C60–6550–60BelgiumHongKongSARUSAUruguayFranceUAEMalaysiaSpainAsystemthathassomegoodfeatures,butalsohasmajorrisksand/orshortcomingsthatshouldbeaddressed.Withouttheseimprovements,itsefficacyand/orlong-termsustainabilitycanbequestioned.ColombiaSaudiArabiaPolandChina(seenote)PeruBrazilSouthAfricaItalyAustriaChinaTaiwanIndonesiaDE35–50JapanMexicoKorea(South)TurkeyIndiaPhilippinesArgentinaThailandAsystemthathassomedesirablefeatures,butalsohasmajorweaknessesand/oromissionsthatneedtobeaddressed.Withouttheseimprovements,itsefficacyandsustainabilityareindoubt.<35NilApoorsystemthatmaybeintheearlystagesofdevelopmentornon-existent.Note:Itshouldberecognisedthatinthisreport,ChinareferstothepensionsysteminmainlandChina.ThepensionsystemsinHongKongSARandChinaTaiwanareshownseparatelyastheyhavedifferentpensionsystems.MercerCFAInstituteGlobalPensionIndex2021Executivesummary|6Table2showstheoverallindexvalueforeachsystem,togetherwiththeindexvalueforeachofthethreesub-indices:adequacy,sustainabilityandintegrity.Eachindexvaluerepresentsascorebetweenzeroand100.Itshouldberecognisedthatthese2021indexvaluesdonotyetfullyrecognisethelonger-termeffectsoftheCOVID-19pandemiconfuturepensionpayments.Table2:Overallindexvalueforeachsystem,includingthethreesub-indicesSub-IndexValuesSystemOverallindexvalueAdequacySustainabilityIntegrityArgentinaAustraliaAustriaBelgiumBrazilCanadaChileChinaColombiaDenmarkFinlandFranceGermanyHongKongSARIcelandIndiaIndonesiaIrelandIsraelItalyJapanKoreaMalaysiaMexicoNetherlandsNewZealandNorwayPeruPhilippinesPolandSaudiArabiaSingaporeSouthAfricaSpainSwedenSwitzerlandChinaTaiwanThailandTurkeyUAEUKUruguayUSA41.575.053.064.554.769.867.055.158.482.073.360.567.961.884.243.350.468.377.153.449.848.359.649.083.567.475.255.042.755.258.170.753.658.672.970.051.840.645.859.671.660.761.452.767.465.374.971.269.057.662.662.081.171.479.179.355.182.733.544.778.073.668.252.943.450.647.382.361.881.258.838.960.961.773.544.372.967.865.440.835.247.759.773.962.160.927.775.723.536.324.165.768.843.546.283.561.541.845.451.184.641.843.647.476.121.337.552.757.554.781.662.557.444.252.541.350.959.846.528.173.767.251.940.028.650.259.849.263.643.086.374.587.471.276.779.359.469.881.493.156.881.287.786.061.069.282.183.974.961.950.076.843.887.983.290.264.135.065.662.581.578.578.380.081.369.350.066.772.684.474.459.2Average61.062.251.772.1Asnotedearlier,eachoverallindexvaluetakesintoaccountmorethan50indicators,someofwhicharebasedondatameasurementswhichcanbedifficulttocomparebetweensystems.Forthisreason,oneshouldnotbetoodefinitethatonesystemisbetterthananotherwhenthedifferenceintheoverallindexvalueislessthantwoorthreepoints.Ontheotherhand,whenthedifferenceisfiveormore,itcanbefairlyconcludedthatthehigherindexvalueindicatesabetterretirementincomesystem.MercerCFAInstituteGlobalPensionIndex2021Executivesummary|7Table3showsthegradeforeachsystem’ssub-indexvaluesaswellastheoverallgrade.Thisapproachindicatesthefactthatsomesystemsmayhaveaweaknessinonearea(e.g.sustainability)whilebeingmuchstrongerintheothertwoareas.Suchaweaknesshighlightsareasforfuturereforms.Table3:Overallindexgradesforeachsystem,includingthethreesub-indicesSub-IndexValuesSystemOverallindexvalueAdequacySustainabilityIntegrityArgentinaAustraliaAustriaDB+CCBEB+EDABBBelgiumBrazilC+CBDEABBCanadaChileBBBB+B+CBCBChinaCC+C+ADDAColombiaDenmarkFinlandFranceCBAABBC+DDCAC+BB+B+CCGermanyHongKongSARIcelandIndiaAC+AAAAADCEDDDB+EC+BIndonesiaIrelandDB+BBAIsraelB+CAItalyBBJapanDDCCDCC+CKoreaDCMalaysiaMexicoCB+DADADACNetherlandsNewZealandNorwayPeruABC+AC+CAB+CACDCC+DBPhilippinesPolandDCDC+C+BDCSaudiArabiaSingaporeSouthAfricaSpainCC+ABCCDBDEB+B+ACSwedenSwitzerlandChinaTaiwanThailandTurkeyBBBBBBACDDDCCBDDCDECBUAECBUKBBCAUruguayUSAC+C+C+C+DC+BCMercerCFAInstituteGlobalPensionIndex2021Executivesummary|8OverallrecommendationsChapter5makesseveralsuggestionstoimproveeachretirementincomesystem.Althougheachsystemreflectsauniquehistory,therearesomecommonthemesforimprovementasmanysystemsfacesimilarproblemsinthedecadesahead.•••reducingtheleakagefromtheretirementsavingssystempriortoretirementtherebyensuringthatthefundssaved,oftenwithassociatedtaxationsupport,areusedfortheprovisionofretirementincomereviewingtheindexationofpublicpensionsasthemethodandfrequencyofincreasesarecriticaltoensurethattherealvalueofthepensionismaintained,balancedbyitslong-termsustainabilitySignificantpensionreformisnevereasybutanimportantstartingpointistoexpresstheobjectivesoftheoverallsystem.AsvanPoptaandSteenbeek(2021)recentlynoted:“Theobjectiveofpensionreformmustbecrystalclearandtheperspectivesofallstakeholders–consumers,employers,government,industry–mustimprovingthegovernanceofprivatepensionplansandintroducinggreatertransparencytoimprovetheconfidenceofplanmembersbeaddressed.”AstherecentreviewintoAustralia’s2TheWorldEconomicForum(2017)highlightedthreekeyareasthatwillhavethebiggestimpactontheoverallleveloffinancialsecurityinretirement.Thesewereto:retirementincomesystemcommented:“Anagreedobjectiveisneededtoanchorthedirectionofpolicysettings,helpensurethepurposeofthesystemisunderstood,andprovideaframeworkforassessingtheperformanceofthesystem."3Therecontinuetobearangeofreformsthatcanbeimplementedtoimprovethelong-termoutcomesfromretirementincomesystems.Theseinclude:•increasingthecoverageofemployees(includingnon-standardworkers)andtheself-employedintheprivatepensionsystem,recognisingthatmanyindividualswillnotsaveforthefuturewithoutanelementofcompulsionorautomaticenrolment•providea“safetynet”pensionforall•improveeaseofaccesstowell-managedcost-effectiveretirementplans••••increasingthestatepensionageand/orretirementagetoreflectincreasinglifeexpectancy,bothnowandintothefuture,therebyreducingthecostsofpublicly•supportinitiativestoincreasecontributionratesfinancedpensionbenefits4Eachofthesefactorsiscriticalandallhavebeenhighlightedwithintheadequacyorsustainabilitysub-indexes.promotinghigherlabourforceparticipationatolderages,whichwillincreasethesavingsavailableforretirementandlimitthecontinuingincreaseinthelengthofretirementAstheWorldEconomicForumreporthighlighted:“Healthypensionsystemscontributepositivelytowardscreatingastableandprosperouseconomy.”5encouraginghigherlevelsofprivatesaving,bothwithinandbeyondthepensionsystem,toreducethefuturedependenceonthepublicpensionwhilealsoadjustingtheexpectationsofmanyworkersintroducingmeasurestoreducethegenderpensiongapandthosethatexistforminoritygroupsinmanyretirementincomesystems234vanPoptaandSteenbeek(2021),TransitiontoanewpensioncontractintheNetherlands:Lessonsfromabroad,NetsparIndustrySeries,Occasional3/21,p9.AustralianGovernmenttheTreasury(2020),RetirementIncomeReview,FinalReport,p27Itshouldbenotedthatseveralsystemshavemovedinthisdirectioninrecentyears.Nevertheless,veryfewarelinkingthefuturepensionagetothelikelyongoingincreasesinlifeexpectancy.5WorldEconomicForum(2017),p9.MercerCFAInstituteGlobalPensionIndex2021BackgroundtotheIndex|902/BackgroundtotheIndexThestructureandcharacteristicsofpensionsystemsaroundtheworldexhibitgreatdiversitywithawiderangeoffeaturesandnorms.Comparisonsarenotstraightforward.Inaddition,thelackofreadilyavailableandcomparabledatainrespectofmanysystemsprovidesadditionalchallengesforsuchacomparison.Therefore,thisreportusesawidevarietyofdatasourcesdrawingonpubliclyavailabledata,whereverpossible.MercerCFAInstituteGlobalPensionIndex2021BackgroundtotheIndex|10Thesechallengesofdataandbenchmarkingshouldnot,however,preventthecomparisonofretirementincomesystems.InitsinfluentialreportAvertingtheOldAgeCrisis,theWorldBank(1994)recommendedamulti-pillarsystemfortheprovisionofold-ageincomesecurity,comprising:•••Pillar1:Amandatorypubliclymanagedtax-financedpublicpensionPillar2:Mandatoryprivatelymanaged,fullyfundedbenefitsWithinthecontextofourageingpopulationsandthecurrenteconomicconditions,itistooimportanttoignore.Furthermore,thereisnodoubtthatprograms,policiesandpracticesadoptedinsomeretirementincomesystemsprovidevaluablelessons,experienceorideasforthedevelopmentorreformofothersystems.Pillar3:VoluntaryprivatelymanagedfullyfundedpersonalsavingsSubsequently,theWorldBank(2008),aspartofitsPensionConceptualFramework,extendedthisthree-pillarsystemtothefollowingfive-pillarapproach:ThiseditionoftheIndexcompares43retirementincomesystems,highlightingboththeconsiderablediversityandthepositivefeaturespresentinmanysystems.Notwithstandingthesehighlights,thestudyalsoconfirmsthatnopensionsystemisperfectandthateverysystemhassomeshortcomings.InChapter5,suggestionsaremadeforimprovingtheefficacyofeachretirementincomesystem.Inthatrespect,itishopedthisstudywillactasastimulusforgovernmentsandpolicymakersaroundtheworldtoreviewretirementincomesystemssothattheoutcomesforfutureretireescanbeimproved.•••ZeroPillar:Anon-contributorybasicpensionfrompublicfinancesthatmaybeuniversalormeans-testedFirstPillar:AmandatedpublicpensionplanthatispubliclymanagedwithcontributionslinkedtoearningsSecondPillar:Mandateddefinedcontribution,fullyfundedoccupationalorpersonalpensionplanswithfinancialassets••ThirdPillar:VoluntaryandfullyfundedoccupationalorpersonalpensionplanswithfinancialassetsFourthPillar:Avoluntarysystemoutsidethepensionsystemwithaccesstoarangeoffinancialandnon-financialassetsandinformalsupportsuchasfamily,healthcareandhousing.Figure2:PensionConceptualFrameworkThemulti-pillarapproachPillar0Pillar1Pillar2Pillar3Pillar4AbasicpublicpensionthatprovidesaminimallevelofprotectionApublic,mandatoryandcontributorysystemlinkedtoearningsFinancialandnon-financialsupportoutsideformalpensionarrangementsAprivate,mandatoryandfullyfundedsystemAvoluntaryandfullyfundedsystemMercerCFAInstituteGlobalPensionIndex2021BackgroundtotheIndex|11AdequacyIneffect,theoriginalfirstpillarwassplitintoaZeroPillarandamandatoryFirstPillar.AnewFourthPillarwasalsoaddedthatincludesaccesstonon-pensionassetsandinformalsupport.Theadequacyofbenefitsisperhapsthemostobviouswaytocomparedifferentsystems.Afterall,theprimaryobjectiveofanypensionsystemistoprovideadequateretirementincome.Hencethissub-indexconsidersthebase(orsafety-net)levelofincomeprovidedbyeachsystemaswellasthenetreplacementrateatincomelevelsrangingfrom50percentto150percentoftheaveragewage.Thisfive-pillarapproachprovidesagoodbasisforcomparingretirementincomesystemsaroundtheworld.Hencetherangeofindicatorsusedinthisreportconsidersfeaturesorresultsassociatedwitheachpillar.IncontrasttotheWorldBank,theOECD(2017a)adoptsathree-tiersystem,namely:Criticaltothedeliveryofadequatebenefitsisthedesignfeaturesoftheprivatepensionsystem(i.e.theSecondandThirdPillars).Althoughtherearemanyfeaturesthatcouldbeassessed,wehaveconsideredthefollowingsix,eachofwhichrepresentsafeaturethatwillimprovethelikelihoodthatadequateretirementbenefitsareprovided:••Tier1–AuniversalortargetedpensionTier2–Amandatorysavingssystem,providedbyeitherthepublicorprivatesector•Tier3–Avoluntarysavingssystemintheprivatesector•Arevoluntarymembercontributionsbyanaverage-incomeearnertoafundedpensionplantreatedmorefavourablybythetaxsystemthansimilarsavingsinabankaccount?Istheinvestmentincomeearnedbypensionplansexemptfromtaxinthepre-retirementand/orpost-retirementperiods?Thefirstquestionassesseswhetherthegovernmentprovidesanyincentivestoencourageaverage-incomeearnerstosaveforretirement.Itisrecognisedthatthetaxationtreatmentofpensionsvariesgreatlyaroundtheworldsothisquestionassesseswhetheranincentiveexistsornot,notthevalueoftheconcession.Thesecondquestionrecognisesthatthelevelofinvestmentearningsiscritical,especiallyfordefinedcontributionplans.Ataxoninvestmentincomereducesthecompoundingeffectandwillthereforereducetheadequacyoffuturebenefits.TheCentreofExcellenceinPopulationAgeingResearch(2018)suggeststhatthefirsttierisprimarilyasafetynetdesignedforthoseunabletoprovideforthemselves.Ontheotherhand,thesecondtierrepresentssomeconsumptionsmoothingfromone’sworkingyearstotheretirementyears.Thethirdtierisvoluntaryandenablessomehouseholdstosavemorethanrequiredunderthemandatorysystem.Whil