Ireland has the 11th best pensions system in the world, according to the 2019 Melbourne Mercer Global Pensions Index.
The index placed Ireland ahead of countries such as Germany, the UK, France, Spain and Austria. However, the high ranking masks underlying concerns about sustainability.
With the ratio of workers to pensioners set to fall from 5:1 today to 2:1 by 2050, there will be less workers to fund the state pension in the future.
"Ireland ranked very high in terms of adequacy, that's the level of income in retirement and that's heavily influenced by the state pension which is comparatively generous by international standards," said Caitriona MacGuinness, DC and Master Trust Leader at Mercer in Ireland.
"However, we have a low score on what we call sustainability. We were 27th out of 37. Sustainability really focuses on the likelihood that the current system will continue to be able to provide benefits."
The Government plans to introduce auto-enrolment in 2022, and it has the potential to substantially improve pension provision in Ireland.
"It won't fully solve the problem, there will be issues with sustainability of the state pension but it is likely to be a game changer. At the moment outside of the state employees, only one in every two people working in the private sector have pension savings outside the state pension," Ms MacGuinness said.
The state pension has to be paid by the state so reduced government debt would be positive also, she said.
Pension provision has fundamentally changed in the UK since the introduction of auto-enrolment in 2012. It is hard for some facing retirement in 20, 30 or 40 years to start saving for their retirement, but when people are signed up for a pension automatically, they tend not leave the scheme.
The index compares 37 retirement systems across the globe and covers almost two-thirds of the world's population. It highlights the broad spectrum and diversity of the world's pension systems, demonstrating even the world’s best systems have shortcomings.
The Netherlands is ranked number one in the global pension index.
"They have a generous state pension but they also have that element of encouraging people in the private sector to save for retirement without a type of compulsory system for private pension saving," Ms MacGuinness said.