Key Takeaways
- • Canada ranked 12th globally in the 2025 Mercer CFA Institute Global Pension Index, maintaining a B grade and raising its overall score to 70.4 from 68.4 a year earlier.
- • Canada's integrity sub-index score of 80.2 places it among global leaders in pension governance, while adequacy scored 67.2 and sustainability 67.0.
- • Mercer attributed part of the score increase to a new question in the Sustainability sub-index, updated IMF economic growth data, and clarification on protection of benefits from fraud and mismanagement.
- • Ottawa's reforms, following a 2024 mandate to former Bank of Canada governor Stephen Poloz, include lifting the 30% ownership cap on voting shares that had limited pension fund influence in corporate governance.
- • Mercer frames Canada's policy-incentive approach as aligned with its guiding principles for balancing national priorities against fiduciary duty.
Summary
Canada's retirement system moved up the global rankings in the 2025 Mercer CFA Institute Global Pension Index, a result the report links to federal efforts to channel more pension capital into domestic investment. Canada ranked 12th globally, retained a B grade, and raised its index score to 70.4 from 68.4 the previous year. Sub-index results were 67.2 for adequacy, 67.0 for sustainability and 80.2 for integrity, the last of which places Canada among global leaders in pension governance.
Mercer analysts attributed the higher score partly to a new question in the Sustainability sub-index, updated economic growth data published by the International Monetary Fund, and clarification of the protection of benefits from fraud and mismanagement. The report describes Canada's retirement framework as resting on three pillars: a universal flat-rate pension with income-tested supplements, earnings-related national pensions, and a voluntary sector of occupational and individual savings plans. Defined benefit programs remain common, while defined contribution arrangements continue to expand.
Ottawa has been exploring ways to encourage pension fund investment in Canadian infrastructure, artificial intelligence and venture capital. Following a 2024 mandate, former Bank of Canada governor Stephen Poloz led a review that produced new measures to ease domestic investment. Among them was the decision to lift the 30% ownership cap on voting shares, a rule originally designed to limit pension funds' influence in corporate governance.
Mercer places this reform within a broader global trend, noting that many governments are reviewing the role of private pension fund investment in the economy. The report says Canada's approach favours policy incentives over mandates, consistent with one of its eight guiding principles for balancing national priorities with fiduciary duty. Quoting the report, initiatives that reduce barriers to domestic investing by facilitating access to strategic asset classes could retain and attract capital from Canadian pension funds and draw additional capital from a much larger pool of foreign investors.
Mercer also identified areas where Canada could improve its ranking, including expanding occupational plan coverage in the private sector, developing more accessible retirement products for workers without employer-sponsored plans, increasing participation among older workers, and reducing household and government debt. The report cautions that, while the B grade signals a strong framework, demographic pressures and persistent private savings gaps require continued vigilance.
Mercer analysts attributed the higher score partly to a new question in the Sustainability sub-index, updated economic growth data published by the International Monetary Fund, and clarification of the protection of benefits from fraud and mismanagement. The report describes Canada's retirement framework as resting on three pillars: a universal flat-rate pension with income-tested supplements, earnings-related national pensions, and a voluntary sector of occupational and individual savings plans. Defined benefit programs remain common, while defined contribution arrangements continue to expand.
Ottawa has been exploring ways to encourage pension fund investment in Canadian infrastructure, artificial intelligence and venture capital. Following a 2024 mandate, former Bank of Canada governor Stephen Poloz led a review that produced new measures to ease domestic investment. Among them was the decision to lift the 30% ownership cap on voting shares, a rule originally designed to limit pension funds' influence in corporate governance.
Mercer places this reform within a broader global trend, noting that many governments are reviewing the role of private pension fund investment in the economy. The report says Canada's approach favours policy incentives over mandates, consistent with one of its eight guiding principles for balancing national priorities with fiduciary duty. Quoting the report, initiatives that reduce barriers to domestic investing by facilitating access to strategic asset classes could retain and attract capital from Canadian pension funds and draw additional capital from a much larger pool of foreign investors.
Mercer also identified areas where Canada could improve its ranking, including expanding occupational plan coverage in the private sector, developing more accessible retirement products for workers without employer-sponsored plans, increasing participation among older workers, and reducing household and government debt. The report cautions that, while the B grade signals a strong framework, demographic pressures and persistent private savings gaps require continued vigilance.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.