The Sustainability Story — Podcast Summary

Episode Title: Christine Mahoney: What the Mercer CFA Institute Global Pension Index Says About the Health of Retirement Systems
Release Date: October 15, 2025
Host: Mike Wahlberg, CFA Institute
Guest: Chris Mahoney, Senior Partner, Mercer

Overview: Main Theme and Purpose

This episode delves into the findings and implications of the 2025 Mercer CFA Institute Global Pension Index Report—a comprehensive, annually produced study that benchmarks retirement system health across 52 countries. Christine (Chris) Mahoney, Mercer’s global pension leader, explains how the report is structured, the criteria it uses, and the practical and policy lessons drawn from its global comparisons. The episode emphasizes the sustainability, adequacy, and governance (“integrity”) of retirement systems, the evolving landscape of private and public pensions worldwide, and the increasingly complex role of government policy in directing pension investments.

Key Discussion Points and Insights

1. What is the Global Pension Index?

• Purpose & History ([01:26]):

  • Began 17 years ago to inform policymakers about pension system strengths and weaknesses across countries.
  • Now includes 52 countries, covering approximately 65% of the global population.
  • Covers public and private pensions, and even broader retirement assets (e.g., home ownership).

• Comprehensive & Comparative:

  • Over 50 indicators are evaluated per country.
  • Systems are rated and comparatively scored.

• Data Sources & Methods ([02:31]):

  • Both objective (hard data) and subjective criteria, striving for transparency.
  • Formal arrangements are easier to assess objectively.

2. How Are Countries Ranked?

• Recent Rankings ([03:08]):

  • Top performers: Nordic countries, Singapore (new entrant), Israel, Australia, Chile (A or B+ ratings).
  • Canada received a "B"; US at "C+".
  • Bottom: Turkey, Philippines, Argentina, India ("D").

• Reaction to Rankings:

  • National pride and competitiveness are common responses.
  • Even experts tend to check their home country’s ranking first.

3. Index Construction & The Three Pillars ([04:25])

• Three Core Principles:

  1. Adequacy: Ensuring retirees have a dignified standard of living.
  2. Sustainability: The ability of systems to withstand demographic and economic pressures.
  3. Integrity: Strength and reliability of the regulatory framework.

• Transparency & Use ([06:30]):

  • Ratings available by pillar and individual indicator.
  • Each country receives tailored recommendations for improvement.

4. Sustainability in Depth ([07:46])

• What’s Measured?

  • Coverage rate: % of population in funded plans.
  • Pension assets as % of GDP, labor force participation, pace and nature of demographic shifts (aging, longevity, fertility).
  • Existence of mandatory contributions, later retirement age, economic growth trends.

• Hard vs. Soft Data:

  • Most sustainability measures are quantitative, though some judgment is needed.

5. Defined Benefit (DB) vs. Defined Contribution (DC) Trends ([09:40])

• Decline in DB Plans:

  • Especially in US and Canada—DC is now more common.

• Index Scoring ([10:03]):

  • Countries don’t automatically score better for DB but systems that ensure reliable income streams (including well-designed DC) are rewarded.
  • Example: Netherlands’ transition from DB to DC, but with integrated income guarantees.

• Risks & Shortcomings:

  • DC systems allowing lump-sum withdrawals can undermine adequacy and sustainability.

6. Policy Reforms That Boost Scores ([11:25])

• Effective Reforms:
  • Strong governance (e.g., independent boards).
  • Removing investment limitations to allow better portfolio performance.
  • Mandatory contributions and income in retirement.

7. Special Chapter: Government Influence on Pension Investing ([12:03])

• Motivation:

  • $63 trillion+ in global pension assets; policymakers now eye pensions as tools for broader economic and social goals.
  • Common trends: mandates for domestic investment, infrastructure, etc.

• Key Takeaway:

  • The manner of government intervention is critical; balance is needed to protect retirement objectives without harming national interests.

8. Types of Governmental Influence ([14:01])

• Spectrum of Interventions:

  • From fiduciary-focused high-level rules to outright investment approval/mandates.
  • Restrictions generally correlate with lower returns.

• Memorable Quote ([15:32]):

  "One of the things the report found is that the lower your restrictions, the higher the returns of the system." — Chris Mahoney

9. Eight Guiding Principles for Balancing National and Pension Interests ([15:41])

• Retirement First Principle:

  • Top priority must always be the retirement security of plan members.
  • Sacrificing participant outcomes for national objectives should be a red flag.

• Balancing Trade-offs:

  • Complex when policies affect different generations or demographic groups.
  • Political challenges abound (e.g., France’s retirement age protests).

10. Public-Private Partnerships & Infrastructure Investing ([18:15])

• Natural Alignment:
  • Infrastructure and government bonds often fit pension investment needs (especially in aging countries).
  • Key is structuring investments to serve both national and retirement interests, with proper governance.

11. Policy Incentives vs. Mandates ([20:34])

• Emphasis on Flexibility:

  • Incentives and guidance lead to better adaptation and outcomes than rigid prescriptive rules.

• Memorable Quote ([21:22]):

  "The more the world is variable and changing rapidly... the more experimentation you have, the more opportunity you give systems to actually run to what makes the most sense. You get better outcomes." — Chris Mahoney

• Risk of Over-Regulation:

  • Banning asset classes (e.g., private investments) could prevent participation in key sectors of the economy.

12. Democratizing Access to Private Assets ([22:32])

• Expanding Participation:

  • Debate on allowing D.C. participants and average savers access to private assets.
  • Key: Interpose fiduciaries to evaluate suitability and educate beneficiaries.

• Practical Route:

  • Use blended, institutionally managed products to balance liquidity and risk.
  • Ongoing evolution from the old model of restricting investments to institutions/high-net-worth only.

• Memorable Quote ([25:03]):

  "Once again, it has to be to the advantage of the participant... Making sure that you have a fiduciary helping you make those decisions... takes away some of the risk. That was the original limitation." — Chris Mahoney

Notable Quotes & Memorable Moments

• On the Purpose of the Index ([01:26]):

  "The purpose of it is really to accumulate information about pension systems around the globe to inform pension legislation and reforms." — Chris Mahoney

• On North American Pension Scorecards ([03:08]):

  "Canada had a B, US had a C plus. And at the bottom of the list, I'm sorry, Turkey, Philippines, Argentina and India all came in with a D." — Mike Wahlberg

• On Adequate Pension Design ([10:03]):

  "You can have a defined contribution plan that is well designed to establish an income stream in retirement, or you could have a defined contribution plan that doesn't, and so that will affect your score." — Chris Mahoney

• On Governance and Investment Restrictions ([15:32]):

  "The lower your restrictions, the higher the returns of the system... I don't believe there is any country that has zero restrictions, but the lower ones are the ones that get the highest scores for sustainability." — Chris Mahoney

• On Policy Approaches ([21:22]):

  "You give good guidance for how to make decisions, but you don't prescribe each of the decisions very carefully. I think you get a better outcome." — Chris Mahoney

Timestamps for Important Segments

• Intro & Index Origins: [01:20]
• Ranking Highlights: [03:08]
• Three Pillars Explained: [04:43]
• Measuring Sustainability: [07:46]
• DB vs. DC Systems: [09:40]
• Policy Trends & Reforms: [11:25]
• Government and Investment Policy: [12:03]
• Types of Government Constraints: [14:01]
• Best Practices & Principles: [15:41]
• Incentives over Mandates: [20:34]
• Democratizing Private Assets: [22:32]

Lightning Round: Career Reflections ([26:09])

• First Job: Actuary at Coopers and Lybrand, New York.
• Advice for Younger Self:

  "When they tell you the defined benefit and retirement systems are going away, don't listen... you just need to make progressive improvements in systems and not think that they disappear on a day."

Conclusion

This episode is a wide-ranging, insightful look at the current state and future of global retirement systems. Chris Mahoney expertly distills complex topics—policy, demography, investing, governance—into practical takeaways for investors, policymakers, and practitioners alike. The overriding message: Robust, sustainable pension systems require clear principles, flexible policy tools, and unwavering focus on participants’ best interests—especially in a world that’s aging and changing faster than ever.

For further info and to access the full report: Visit the CFA Institute and Mercer websites.