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India fares poorly in global ranking of pension systems

-The Hindu Business Line

Iceland tops Mercer study on retirement income systems

Old age security is a big worry for Indians as income at retirement is far from adequate for most people. Now, a global study done by Mercer Consulting validates this fear as it reveals that the Indian pension system ranks a lowly 40 in a comparative index of 43 systems.

The primary objective of this annual survey by the global management consulting firm is to benchmark each retirement income system using more than 50 indicators.

This year’s index edition added four new retirement systems — Iceland, Taiwan, the UAE and Uruguay. In its maiden appearance in the Index, Iceland overthrew the Netherlands to receive the highest overall index value of 84.2. Thailand had the lowest overall index value at 40.6.

Sub-indices

According to the survey, India had an overall index value of 43.3 among the countries analysed.

The index highlights key strengths of retirement pension systems around three sub-indices — adequacy, sustainability and integrity, where India scored 33.5, 41.8 and 61.0, respectively.

The adequacy sub-index represents the adequacy of the benefits that are being provided, the sustainability sub-index represents the likelihood that the current system is able to provide benefits in the future, while the integrity sub-index includes many legislative requirements that influence the overall governance and operations of the system which affect the level of confidence that citizens have in their system.

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