Offering employees a retirement plan can be a great recruiting and engagement tool, but pension systems around the globe are under tremendous pressure because of rising life expectancy, burgeoning government debt, an uncertain economic outlook and a shift toward defined-contribution plans, according to the Melbourne Mercer Global Pension Index. In the U.S., workers typically have a public and private pension plan. Some employers continue to offer defined benefit pensions, while others use a defined contribution retirement plan, such as a 401(k).

Northern Europe

The Melbourne Mercer Global Pension Index notes that four of the top six global pension plans are in Northern Europe. The Netherlands, for example, offers a public pension plan that's based on the worker's number of years employed. Dutch employees also benefit from a semi-mandatory occupational pension linked to earnings and industrial agreements. Most Dutch employers have joined these occupational plans, which are industry-wide defined benefit plans.

South Africa

South Africa's public pension system uses a "means test," so workers with higher private savings receive a lower public pension and vice versa. Like the Netherlands, South Africa has industry-related retirement plans that most employers have joined. Overall, South Africa's pension system receives a "C" grade, according to BusinessTech, because it doesn't mandate a minimum amount of private retirement savings for workers, which compels the public system to close ensuing gaps.


Confronted with an aging population and a low birth rate, Japan decided to reform its pension system. Its system is now similar to that of the U.S., where deductions from the pay of workers goes toward a fund from which retirees receive benefits. The reforms will adjust pension benefits according to changes in inflation and worker wages, reports The Japan Times.

While retirement savings plans will doubtless continue to be useful in recruitment and employee engagement, they are getting more complex and increasingly difficult to implement overarchingly across the world.

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Tags: Retirement Global Workforce