India has ranked lowest in a Global Pension Index among 25 countries after the Indian index value fell from 43.5 in 2014 to 40.3 in 2015 primarily due to the revision in the household saving rate. Denmark has emerged as number one in the list with Netherlands and Australia ranking second and third. While the pension system of USA ranks at 14th, China is only three places ahead of India, the study by global consulting major Mercer said.
At 10th spot, Singapore is the only Asian country surfacing among the top ten countries when it comes to pension system.
“The world’s most comprehensive comparison of pension systems has revealed the standard of retirement savings systems across the world is increasing, but the macro trends of increasing life expectancy and an ageing population are placing such incredible pressure on governments that continual review and improvement remains vital to ensuring that pensions systems can continue to deliver,” a Mercer statement said.
The Index is produced through a collaboration between Mercer, and ACFS, an independent not-for-profit research centre, with funding provided by the Victorian Government as part of its ongoing support for leadership in the pension and superannuation industry, the Mercer website reads.
Melbourne Mercer Global Pension Index (MMGPI) report also said enhanced participation in the National Pension System (NPS), which was launched by the government in June as part of Pradhan Mantri Jan Dhan Yojana, will help the country increase its index value.
Australia, Germany, Japan, Singapore and the UK have increased their pension age to offset the increase in life expectancies.
Now in its seventh year, the MMGPI measured 25 retirement income systems against more than 40 indicators, under the sub-indices of adequacy, sustainability and integrity.
The report covers close to 60 per cent of the world’s population and suggests how governments can provide adequate and sustainable benefits that protect their citizens, against longevity risk.
The report rated Denmark as the country with the best retirement system for the fourth consecutive year in 2015, with an overall score of 81.7. However, it said that the Indian retirement system continues to rank last.