Australian retirement system graded A
Australia is one of six countries to receive an A grading for its retirement income system in the latest Marsh CFA Institute Global Pension Index.
Australia’s retirement income system is one of six global systems to receive the grade of A in the 18th annual Marsh CFA Institute Global Pension Index (MCGPI).
The achievement marks the first time this nation’s retirement savings framework was awarded the highest ranking.
The index compares 55 retirement income systems worldwide, covering 66 per cent of the world’s population. Australia’s index value rose from 77.6 in 2025 to 80.6 in 2026, due to an increase in the net pension replacement rates at retirement.
“The decisions we make today to build sustainable systems will have a profound impact on people’s financial security. Increasing longevity is too significant to ignore, with wide-ranging impacts on individuals, governments, economies and societies,” Marsh people and investment chief executive and president Pat Tomlinson said when announcing the global results.
The other five nations to receive an A grading were the Netherlands, Denmark, Iceland, Singapore and Israel.
The MCGPI report noted the Australian system provides a strong minimum level of support for the poorest older individuals and “has strong coverage of all employees in superannuation schemes and a strong level of pension assets as a percentage of GDP (gross domestic product)”.
“Further, the system has strong regulation and governance along with protection and communication to members,” the report acknowledged.
However, the study also pointed out areas where the Australian system could improve, such as its retirement income focus as the primary purpose of superannuation and moderating the assets test on the age pension to increase the net replacement rate for average-income earners taking the minimum government drawdown.
“The data shows that even the best-performing systems need to keep evolving; no system can afford to stand still in the face of these demographic shifts,” Marsh people and investments partner and lead author of the report Tim Jenkins explained.
“What every system shares is the need to adapt. Retirement design must become more flexible in when people access income, in how products are structured and in how we think about the line between work and retirement.”
By: Penny Pryor | October 21, 2026 | smsmagazine.com.au
