Aussie super regains No2 slot

However, Australia could emerge on top if the government goes ahead with plans to lift the compulsory super savings rate to 12 per cent from 9 per cent, reports the latest Global Pension Index.

"Australia is quite a robust system, we're relatively well funded, we're still putting additional money aside and we don't have the demographic pressures which are extreme in other countries," said David Knox, senior partner with Mercer, a superannuation advisory firm. "But if we move in the direction of increasing the superannuation guarantee, increasing the workforce participation rate among older Australians . . . then we can actually become the first gold-standard [superannuation] system," he said.

The index tracks public and private superannuation systems across 16 countries from Europe, Latin America and parts of Asia. The rankings are compiled through a combined measure of payout on retirement, whether a country can afford a scheme over time, and the level of trust in the superannuation system.

Australia regained its second spot in the rankings with an overall score of 75, up from fourth place last year. It was behind the Netherlands on 77.9. China was last, at 42.5.

Still, the study found Australia had the largest exposure to sharemarkets among global schemes, which can leave retirees' savings vulnerable to wild swings.

It comes in the midst of a shake-up of Australia's super sector, including tougher oversight of funds.

The move is aimed at improving confidence in the superannuation industry, as volatile global markets have produced shrinking returns, and follows recommendations from the federal government's "stronger super" reforms.

All the super ranking - Money liftout