US pension system graded C+ as sustainability score slips to 57.1

The US retirement system earned a C+ in the newly released 2026 Marsh CFA Institute Global Pension Index, with an overall score of 61.6 and a sustainability score of 57.1. The overall score rose from 61.1 in 2025, while the sustainability measure slipped from 59.9.

The index, produced by Marsh (NYSE: MRSH) and CFA Institute with the Monash Centre for Financial Studies in Melbourne, benchmarks 55 retirement income systems covering roughly 66% of the world's population on adequacy, sustainability, and integrity. It defines a C+ as a system with "some good features but also major risks and shortcomings."

The six A-grade systems—the Netherlands, Denmark, Iceland, Singapore, Israel, and Australia—share near-universal coverage, strong governance, and funded structures that do not rely solely on pay-as-you-go financing. The Netherlands topped the index at 85.8, followed by Denmark at 84.1 and Iceland at 84.0; Australia earned an A grade for the first time at 80.6.

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. That coverage gap lands on the household balance sheet rather than the federal one.

"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.

A plan that leans on current Social Security benefit formulas, a voluntary workplace plan, and an average life expectancy is a plan with three soft assumptions. The index's sustainability score of 57.1, down from 59.9, argues for modeling a shortfall rather than the statute.

A benefit-cut line belongs inside every income plan advisors write; the index now supplies an independent grade to point to when a client asks why the plan holds back.

The report's chapter on aging populations cites United Nations World Population Prospects 2024 data: 43 of the 55 systems have fertility rates below 2.1, and 23 are below 1.5. Fewer future workers per retiree is the mechanism behind the pay-as-you-go sustainability pressure.