Note the 2025 Index was released last week.
*Michael Littlewood NZ Superannuation Guru, has always been critical of the formula used by this Index, so be wary!
Mercer pension study makes case for higher NZ retirement age, KiwiSaver incentives…
October 19, 2025
Anna Scott: Mercer NZ chief
Newly installed Mercer NZ chief, Anna Scott, has backed calls to increase the pension age and ringfence KiwiSaver for retirement purposes in the wake of the global group’s latest review of the sector.
“Mercer believes it is the right time to have a serious conversation about gradually increasing the age of eligibility for NZ Super, to ensure we future-proof New Zealand’s retirement system,” Scott said in a release.
Furthermore, she said the government needs to refocus KiwiSaver “primarily as a source of retirement income” while boosting support for stay-at-home parents who sacrifice paid employment for raising children.
The recommendations are in line with findings of the 2025 Mercer CFA Institution Global Pension Index released last week that ranked NZ in a more-or-less steady-state 17th out of 52 jurisdictions covered by the long-running study.
NZ retained a B-grade in the Mercer 2025 analysis, albeit with a slightly improved score year-on-year across all three retirement system factors under review – adequacy, sustainability and integrity.
But as well as raising the retirement age, the Mercer report suggests NZ could supercharge KiwiSaver by raising contribution rates and incentives.“Increasing the level, coverage and tax efficiency of KiwiSavercontributions, thereby increasing the level of assets set aside forfuture retirement benefits,” would lift NZ in the global pension rankings, the study says.
Despite the niggles, NZ still rates highly in the Mercer pension universe – especially for ‘integrity’ where the country earns an A-grade.
Per the Mercer complex scoring system, NZ is still 4.6 points adrift of the 75 result that would elevate it into the B+ realm inhabited by Australia, which despite it’s A$4 trillion plus pool of superannuation assets has yet to crack the elite A-rated group.
“This study shows that the Netherlands, Iceland, Denmark, Singapore and Israel have the best systems, each of them receiving an A grade in 2025,” the report says. “Although the Netherlands is currently undertaking significant pension reform, moving from a mostly collective benefit structure to a more individual defined contribution (DC) approach, its system continues to receive the highest Index score. The reason for this rating is that, notwithstanding these changes, the system may continue to provide very good benefits, supported by a strong asset base and very sound regulation.”
And in an era where governments are increasingly eyeing up private pension assets to pursue public objectives, Mercer offers eight key recommendations to balance member “best interests and the national interest”.For example, the report says the state should not mandate asset class exposures for private pension funds.
“Governments can make investments attractive to pension funds without the use of compulsion and should refrain from requiring a ‘floor’ level of investment in a particular asset class.” The study says. “The actual investment decision should be left to the pension fund.”
Many governments already stipulate asset limits for pension schemes while other jurisdictions such as the UK are considering moves to require funds to allocate more to local private companies.
The report also takes a crack at countries such as Australia where superannuation funds are subject to rigid annual performance tests that can trigger mergers or wind-ups if schemes fall under benchmark for several years in succession.“There should be transparent public disclosure relating to the actual investments held and their returns and risks, but no performance tests or fee caps should be applied to pension fund investments,” the Mercer study says.
Among other findings, the report notes governments have also begun to interfere with pension funds on environmental, social and governance (ESG) grounds in a move that can cut both ways.
The NZ government, for instance, required default KiwiSaver funds to avoid certain fossil fuel stocks in the 2021 review while dozens of US states have sacked pension investment managers over ESG-friendly policies.“Although not solely related to ESG, in November 2024, the Netherlands Parliament accepted a motion with a two-thirds majority that states that pension funds should prioritize achieving a financially strong pension for their participants rather than focusing on activist or ideological investments,” the Mercer report says.
Tim Jenkins, Mercer Australia partner, debuted as lead author in the 2025 report, replacing David Knox, who helmed the publication since inception in 2009.
file:///C:/Users/Waugh/Downloads/pdf-global-pension-index-MER-GLOBAL.pdf