New Zealand’s retirement system secured its best-ever result in the Marsh CFA Institute Global Pension Index, climbing to 15th out of 55 systems globally with a B grade. The improvement stems from higher net income replacement rates, strong household savings, and growing assets in KiwiSaver.
New Zealand Ranks 15th Globally in Pension Index
New Zealand’s retirement system earned a B grade and ranked 15th out of 55 systems globally in the latest assessment. The evaluation covers both NZ Super and KiwiSaver, rating retirement schemes across three core sub-indices: adequacy, sustainability, and integrity.
The country achieved its highest score in integrity, earning an A for its communication and governance structures. It recorded B grades for both adequacy and sustainability, though adequacy is its weakest sub-index at 34th out of 55 systems. Top-tier A-rated schemes this year included the Netherlands, Denmark, Iceland, Singapore, Israel, and Australia, which reached the top tier for the first time. At the opposite end, the Philippines, India, Türkiye, and Argentina received D ratings.
Domestic Factors Drive Record-High Score
Tim Jenkins, lead author and partner, superannuation consulting leader at Marsh, pointed to several domestic factors behind the country’s rise in the rankings. The score improved due to higher net income replacement rates, strong household savings, and growing assets within KiwiSaver.
The score increased slightly for adequacy, which is all about the assets in KiwiSaver starting to grow. They’re a little bit higher than they used to be. And the score for integrity also increased with the governance structures in place and the way you communicate. So it’s little improvements every year, it’s leading to a higher score.
Tim Jenkins, lead author and partner, superannuation consulting leader at Marsh
Australia Scores Higher on Sustainability
While New Zealand and Australia share comparable integrity scores, the two neighboring countries diverge on adequacy and sustainability. Australia features a 12 percent superannuation guarantee alongside a means-tested age pension. Jenkins explained that combining a mandatory high contribution rate with a means-tested safety net keeps the Australian system sustainable as the population ages.
In contrast, New Zealand relies on NZ Super alongside KiwiSaver. Because NZ Super is not means-tested and the population is aging, running the scheme will become expensive over time, leading to a lower sustainability score than Australia’s.
Falling Birth Rates Pressure KiwiSaver Contribution and Access Rules
Jenkins noted that no retirement system can stand still in the face of falling birth rates, increasing life expectancies, and a shrinking ratio of workers to retirees. Political parties have previously discussed increasing KiwiSaver contribution rates. Jenkins said this would improve New Zealand’s ranking over time, though the index strictly evaluates systems based on their current state rather than future projections.
New Zealand's adequacy score could be supported by decoupling the KiwiSaver access age from the eligibility age for NZ Super. Many people are working longer and retiring at different ages. Separating the two thresholds would provide workers with greater flexibility in supporting their retirement needs.