The United States retirement system has received a C+ grade in the newly released 2026 Marsh CFA Institute Global Pension Index, placing it below more than two dozen peer nations and renewing pressure on financial advisors to fill a widening gap between what public systems promise and what they can realistically deliver.
The 18th annual index, produced by Marsh (NYSE: MRSH) and CFA Institute in collaboration with the Monash Centre for Financial Studies in Melbourne, Australia, benchmarks 55 retirement income systems across the globe - covering approximately 66% of the world's population - on three dimensions: adequacy, sustainability, and integrity.
The US scored 61.6 overall, up fractionally from 61.1 in 2025, but its sustainability score slipped to 57.1 from 59.9, a signal that the long-term fiscal math is moving in the wrong direction.
"The decisions we make today to build sustainable systems will have a profound impact on people's financial security," said Pat Tomlinson, President and CEO of Marsh People and Investments. "Increasing longevity is too significant to ignore, with wide-ranging impacts on individuals, governments, economies and societies. The time to act is now."
The index scoring system awards a C+ to systems with "some good features but also major risks and shortcomings" whose long-term effectiveness and sustainability "can be questioned."
For advisors managing retirement income strategies, that description maps directly onto the planning challenges they already face: Social Security sustainability concerns, limited access to well-managed workplace plans for millions of workers, and clients who are living longer than their savings were designed to cover.
The Netherlands topped the 2026 index with a score of 85.8, followed by Denmark at 84.1 and Iceland at 84.0. Australia broke into the top tier for the first time, earning an A grade with a score of 80.6. The six A-grade systems (the Netherlands, Denmark, Iceland, Singapore, Israel, and Australia) share a common architecture: near-universal coverage, strong governance, and funded structures that do not rely solely on pay-as-you-go financing.
The US, by contrast, leans heavily on the pay-as-you-go Social Security program and a voluntary 401(k) and 403(b) system that leaves significant portions of the workforce with no employer-sponsored savings vehicle at all.
This year's index features a dedicated chapter on aging populations, and the findings are material to advisor planning assumptions.
Globally, 43 of the 55 systems examined now have fertility rates below 2.1 - the replacement rate needed to sustain a stable population - according to United Nations World Population Prospects 2024 data cited in the report. Twenty-three systems have fertility rates below 1.5.
Life expectancy at age 65 in more developed regions has increased by approximately 50.9% since 1950 and now stands at 20 years, according to the same UN data. Life expectancy at age 80 has grown by approximately 68.8% and now stands at 10 years. Those figures translate directly into longer retirement income horizons and longer periods of portfolio withdrawal risk for advisors managing drawdown strategies.
"Pension systems are under real strain," said Christine Mahoney, the Global Defined Benefit and Defined Contribution Leader of Marsh People and Investments. "Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements for the generations ahead."
Mona Naqvi, Managing Director of the CFA Institute Research and Policy Center, added that the challenge is consistent across all systems: "Delivering reliable income as demographics shift and markets change. No single policy or investment decision can achieve that. It takes sound system design and governance, alongside careful oversight of investments by those with a fiduciary duty to savers and retirees."
The 2026 index identifies three policy responses that policymakers and plan designers should prioritize: establishing clear objectives for retirement systems; strengthening the funding of future retirement obligations; and building greater flexibility into retirement age structures and product design.
On flexibility, the report is direct. Traditional retirement ages of 60 or 65 are increasingly misaligned with the realities of longer, healthier lives, particularly as the boundary between work and retirement blurs driven by the rise of gig employment and part-time work. Fixed retirement ages and inflexible pension structures can create barriers for older workers who are willing and able to remain economically active.
Tim Jenkins, lead author of the report and Partner at Marsh People and Investments, said every system shares the same fundamental need regardless of its current ranking. "Retirement design must become more flexible - in when people access income, in how products are structured, and in how we think about the line between work and retirement. That flexibility is no longer optional."
For US advisors, that framing has direct practice implications. Clients navigating the transition from accumulation to decumulation - particularly those with defined contribution balances rather than defined benefit income - need more sophisticated income sequencing, longevity protection, and phased retirement planning than most current product menus offer.
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