Australia's retirement income system has ranked second in the inaugural Melbourne Mercer Global Pension Index, which compares private and public pension systems from around the world.

The Netherlands came out on top with a score of 76.1 out of 100, followed by Australia (74.0), Sweden (73.5) and Canada (73.2).

Countries were ranked according to adequacy, sustainability and integrity and no country in the survey obtained an A-grade classification (a score greater than 80).

"The fact that no country achieved an A-grade classification confirms that no one system is perfect or currently robust enough to withstand the growing challenges of supporting an ageing population," Mercer worldwide partner for retirement, risk and finance David Knox said.

Knox, who oversaw the study, said Australia needed to strive for A-grade status.

"With Australia's superannuation system currently under the spotlight of the Henry and Cooper review, this index provides a timely reminder that while Australia's system has many good features there is still a lot that can be done to improve the adequacy of the system," he said.

The report said Australia's system could be improved by increasing the level of mandatory contributions, requiring some part of the final benefit to be taken as an income stream and continuing to review the pension age as life expectancy increased.

The countries with the lowest ranking retirement income systems were Japan with a score of 42.5, China (48.0) and Germany (48.2).

The index was a pilot study produced by the Melbourne Centre for Financial Services and Mercer and it considered more than 40 indicators that reflect certain features desirable in all retirement income systems.