Published By: Business Desk
Last Updated: October 18, 2023, 14:10 IST
The 2023 Global Pension index consists of three new retirement revenue methods Botswana, Croatia, and Kazakhstan. (Representative picture)
This yr, the Global Pension Index compares 47 retirement revenue methods throughout the globe and covers 64 per cent of the world’s inhabitants.
Even as India’s retirement system has improved to some extent from final yr, the nation ranked 45 out of the 47 retirement revenue methods analysed, a report stated on Tuesday.
India had an general index worth of 45.9 from 44.5 in 2022, rating 45 out of the 47 retirement revenue methods analysed primarily because of enchancment in adequacy and sustainability sub-indices, based on the fifteenth annual Mercer CFA Institute Global Pension Index (MCGPI).
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The Netherlands had the best general index worth (85.0), intently adopted by Iceland (83.5) and Denmark (81.3). Argentina had the bottom index worth (42.3), it added.
This yr, the Global Pension Index compares 47 retirement revenue methods throughout the globe and covers 64 per cent of the world’s inhabitants.
The Global Pension Index makes use of the weighted common of the sub-indices of adequacy, sustainability and integrity to measure every retirement system towards greater than 50 indicators. The 2023 Global Pension index consists of three new retirement revenue methods Botswana, Croatia, and Kazakhstan.
The report additionally revealed that falling beginning charges has put strain on a number of economies and pension methods over the long run, negatively affecting the sustainability scores for international locations like Italy and Spain.
Several Asian methods, nevertheless, together with mainland China, Korea, Singapore, and Japan, have undertaken reforms to enhance their scores within the final 5 years.
The report additional said that India’s retirement revenue system contains an earnings-associated worker pension scheme, a DC (outlined contribution) worker provident fund (EPFO) and supplementary employer-managed pension schemes which can be largely DC in nature.
The authorities schemes have been launched as a part of the common social safety programme geared toward benefiting the unorganised sector, stated the report.
“Changes in workforce dynamics, employment and family patterns have brought formal sources of retirement to the forefront. While there is improvement in the net pension replacement rate and participation in private pension plans, which is reflected in the value of adequacy and sustainability sub-indices, the coverage of the Indian workforce under private pension plans is still very low (6 per cent),” Mercer – Health and Wealth, India Business Leader Preeti Chandrashekhar said.
Given that India doesn’t have a mandated public pension plan with contributions linked to earnings that goals at changing some pre-retirement revenue, a Social Security System that will increase protection of unorganised workforce in addition to the self-employed would additional enhance the efficacy of the system, she stated.
“There is a growing focus on making India a full pensionable society and the government has undertaken a number of measures towards this. Facilitating further participation in private pensions would encourage higher levels of private savings.
“Focus on funding of gratuity plans, improved communication in terms of disseminating information to the members would go a long way in improving the governance and overall index value. The results from this year’s Mercer CFA Institute Global Pension Index show that India’s pension system is slowly but firmly getting stronger, with more opportunity for improvements,” she added.
(This story has not been edited by News18 workers and is printed from a syndicated information company feed – PTI)
