Türkiye’s pension system ranks among weakest globally, report says

Türkiye has been ranked 45th out of 48 countries in the latest Mercer CFA Institute Global Pension Index, placing it among the lowest-rated nations for pension systems. The report, published by the U.S.-based consulting firm Mercer, compares the pension systems of 48 countries based on adequacy, sustainability and integrity sub-indices.

Mercer Global Pension Index Report

The Mercer Global Pension Index categorizes countries into seven groups ranging from “A” to “E” based on the strength of their pension systems. Countries with robust pension systems, such as the Netherlands, Iceland, Denmark and Israel, are classified in the “A” category, indicating a well-functioning system with a score above 80 points. The Netherlands ranks at the top with 84.8 points, holding the title of the best pension system globally.

On the other hand, Türkiye falls into the “D” category, the lowest-scoring group, alongside South Africa, the Philippines, Argentina, and India. The category is reserved for countries whose pension systems exhibit some desirable features but also significant weaknesses or gaps. These shortcomings must be addressed to ensure the system’s effectiveness and long-term sustainability.

Türkiye’s score and recommendations

Türkiye’s pension system scored 48.3 points on the index, which places it in a precarious position. Although Türkiye’s score improved from 46.3 in 2023 to 48.3 in 2024, thanks to minor improvements in each sub-index, the system still faces considerable challenges.

South Africa, with a score of 49.6, ranks slightly higher than Türkiye. Other countries in the “D” category include the Philippines (45.8 points), Argentina (45.5 points) and India (44 points).

The report calls for specific reforms to Türkiye’s pension system. One key recommendation is to increase the minimum pension payments, which could improve the adequacy of the system. Additionally, the report advises limiting access to private pension funds before retirement to enhance the system’s long-term sustainability.

Global comparison of pension systems

Countries that top the Mercer index, such as the Netherlands and Denmark, feature pension systems that provide adequate income and are financially sustainable over the long term. In contrast, countries like Türkiye, categorized in the lower tiers, must undertake significant reforms to avoid long-term instability in their pension systems.

The report highlights that the weaknesses in Türkiye’s pension system if left unaddressed, could further threaten its sustainability and effectiveness in the future. Immediate action is needed to strengthen the system and ensure the well-being of future retirees.