A fixed, single retirement age is increasingly unworkable as demographic forces skew the population older, according to the latest Marsh review of global pension settings.
The 18th iteration of the study, previously known as the Mercer CFA Global Pension Index (GPI), notes that a one-age-fits-all retirement date is “not a sustainable outcome over the longer term” as the worker-retiree ratio continues to shrink.
But the “solution is not as simple as just increasing the stipulated age of retirement, as there is significant variation in personal circumstances (for example, a manual worker may not be able to work as long as a white-collar worker)”, the GPI report says.
“Given this range of circumstances, as well as the decreasing distinction between work and retirement, the concept of a single retirement age becomes less relevant.”
Instead, Marsh advocates for “flexible” retirement ages that allow individuals to balance personal priorities against financial outcomes.
“Retirement ages do not necessarily need to align between private pension funds and public systems — for example, private systems could allow access to retirement income from an earlier retirement age,” the study says.
Flexible retirement ages should be relatively simple to implement in defined contribution systems like KiwiSaver, Marsh says, but pose issues for defined benefit schemes.
And individualised retirement age rules would need lower and upper limits to “avoid a pension system becoming a tax-preferred savings or a quasi-bequest vehicle”.
Retirement age flexibility is not, yet, a formal component of the GPI ranking system, produced in association with the CFA Institute and the Monash University in Melbourne, although the factor might fit under either ‘adequacy’ or ‘sustainability’ – two of the three ‘sub-index’ categories used to rate the pension regimes of 55 countries in the 2026 study.
NZ ranks 15th in the latest report with an overall score inching up 1 point year-on-year in the 100-point scale to 71.4, equating to a B-rated regime under the Marsh labelling rules.
The NZ “index value increased from 70.4 in 2025 to 71.4 in 2026, due primarily to an increase in the net replacement rates as reported by the OECD and an increase in household savings rate,” the report says.
While NZ improved on its adequacy and integrity scores compared to 2025, the country went backwards by 0.2 per cent in the sustainability gauge. Integrity remains the strong point for NZ, scoring 84 this year, as adequacy (66.5) and sustainability (68) keep the nation in B-land, more than 8 points adrift of the A-territory that Australia ascended to in the 2026 GPI.
Tim Jenkins, Marsh superannuation consulting leader and main GPI author, said in a statement that the NZ pension system “continues to gradually improve” in the rankings.
“The gap to Australia and the other 5 A grade pension systems is about adequacy and financial sustainability: how much income New Zealanders will actually have in retirement, and can the system keep delivering in the future,” Jenkins said.
Denmark, Netherlands, Iceland, Israel and Singapore also live in the GPI-rated A-universe for pension systems.
D-nations include on the Marsh scale include Argentina, India, Philippines and Türkiye.
On the upside, none of the 55 regimes scored and E.
New entrants this year – Dominican Republic, Kenya, and Qatar – expanded the GPI global coverage to “more than 66% of the world’s population”.
The study also notes that the huge demographic shift into retirement phase across the world has potential market-shifting consequences.
“With US$70 trillion invested today through private pension funds, this shift to more defensive and risk-aware assets has implications for global investments,” the report says.