Australians are not always good at celebrating success.
But this week Australia got international recognition for an achievement decades in the making, and one that will matter enormously to the financial security of generations of Australians.
For the first time, Australia’s retirement income system got an A grade in the 2026 Marsh CFA Institute Global Pension Index.
Australia is now one of just six retirement income systems globally to achieve the top grade, alongside the Netherlands, Denmark, Iceland, Singapore and Israel.
That should be a source of enormous national pride because millions of everyday Australians are the ones benefiting from an A-grade super system.
While other nations are battling rising pension costs, Age Pension spending in Australia is projected to fall from 2.3% of GDP today to 1.8% by 2066, even as the number of Australians above pension age doubles.
By comparison, the GDP pension burden in other OECD economies is estimated to be 10 per cent in the United Kingdom, 8 per cent in Canada, 7 per cent in New Zealand, and 6 per cent in the United States.
A timely reminder to policy makers considering policies that put the sustainability of Australia’s retirement system at risk by unpicking a fundamental principle on which our super system was built:saving people’s super for retirement.
The 2026 Marsh CFA Institute Global Pension Index assesses 55 retirement income systems, covering 66 per cent of the world’s population, against more than 50 indicators. It judges countries across three fundamental measures: whether their systems provide adequate retirement incomes, whether they are sustainable over the long term, and whether people can have confidence in their integrity.
Australia’s overall score rose from 77.6 last year to 80.6 this year, pushing us into A-grade territory for the first time, due in the main to an increase in the net pension replacement rates at retirement as published by the OECD. This improvement was supported by the increase in the Super Guarantee to 12%.
However, individual retirement incomes and wealth achieved today are not the only measurements of success – it’s also about the future.
Australia performed particularly strongly on sustainability and integrity, ranking fifth and seventh respectively.
And sustainability matters more than ever.
This year’s Index focuses specifically on the enormous challenge posed by ageing populations. People are living longer, workforce patterns are changing and retirement systems around the world are under growing pressure to finance longer retirements.
Against that backdrop, Australia has achieved something other countries understandably envy: a universal and compulsory savings system that builds private savings during a person’s working life to support them in retirement .
This has taken decades to achieve and policy makers should be aiming to build upon it.
Policymakers should focus their energy on closing the remaining gaps in our super system and ensuring more Australians benefit from it. We should be tackling unpaid super, strengthening super for people whose working lives are interrupted by caring responsibilities, and helping members get more out of their savings in retirement.
And where Australians face serious financial hardship, governments need strong and effective safety nets. We should not force people to solve today’s economic hardship by impoverishing their future selves.
An A-grade retirement system is worth strengthening and protecting.
In future editions of Super Wrap in the coming weeks, we’ll look at different retirement systems around the world; how they compare to Australia and what we can learn from them.
