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While India stands at the 28th position out of the 30 among the reviewed countries in the Melbourne Mercer Global Pension Index 2017, its pension system is found to be more sustainable than that of Poland, Germany, France, Japan, Italy, Austria, Brazil, China and Argentina.
The index measuring 30 countries and covering 60 percent of the world’s population, has urged countries with unsustainable pension systems to take action now, rather than risk the need to take even more drastic action in the future.
Preeti Chandrashekhar, India Business Leader-Retirement, Health and Benefits, Mercer said, “India’s continued increase in sub-index value under sustainability from 40.9 to 43.8 is primarily due to the inclusion of the new economic growth question in the sustainability sub-index.”
The report said the increase in value under the integrity sub-index from 53.4 to 55.1 was due to the government’s efforts to improve transparency and member experience in various schemes.
This year’s Index reveals that Denmark, in its sixth year running, has retained the top position with an overall score of 78.9, ahead of the Netherlands and Australia at 78.8 and 77.1, respectively.
While Australia maintained its number three status within the Index, the overall score slipped from 77.9 in 2016 to 77.1 in 2017, acting as a reminder that despite being world-class, we need further reform to continue to improve our retirement income system.
The Melbourne Mercer global Pension Index is published by the Australian Centre for Financial Studies (ACFS), in collaboration with Mercer and the State Government of Victoria who provides most of the funding.
Jacques Goulet, President of Health and Wealth at Mercer, stressed the need for countries to address sustainability when considering pension reform.
“Increasing life expectancies and low investment returns are having significant long-term impacts on the ability of many systems around the world to deliver adequate retirement benefits both now and into the future,” Goulet said.
The report said in the long-term, there is no perfect pension system, but the principles of best practice are clear and nations should create policy and economic conditions that make the required changes possible.
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