Read at: Business Standard
This study of retirement income systems in 25 countries has confirmed that there is great diversity between the systems around the world with scores ranging from 40.3 for India to 81.7 for Denmark.
The following table summarises the results.
|A first class and robust retirement income system
that delivers good benefits, is sustainable and has a high level of
|B+||75–80||Australia||A system that has a sound structure,
with many good features, but has some areas for improvement that
differentiates it from an A-grade system.
|A system that has some good features,
but also has major risks and/or shortcomings that should be addressed.
Without these improvements, its efficacy and/or long-term sustainability
can be questioned.
|A system that has some desirable features, but also
has major weaknesses and/or omissions that need to be addressed. Without
these improvements, its efficacy and sustainability are in doubt.
|E||<35||Nil||A poor system that may be in the early stages of
development or non-existent.
|Country||Overall Index Value||Sub-Index Values|
|Country||Overall Index Grade||Sub-Index Grades|
A comparison from 2014 to 2015
- The decline in Finland’s score was caused by a combination of factors including a fall in the saving rate, increasing life expectancy and the change to the scoring methodology relating to pension assets.
- The decline in India’s score was primarily caused by the revision in the household saving rate.
- The improved Indonesian score was primarily caused by the higher household saving rate and a decline in life expectancy.
- The improved Italian score was primarily caused by an improvement in the integrity sub-index due to the availability of additional information.
- The improved Mexican score was primarily caused by the higher household saving rate.
- The improved Dutch (Netherlands) score was primarily caused by the higher household saving rate. This improvement shifted the Dutch ranking from third to second and from B+ to A-grade.
- The decline in Singapore’s score was primarily caused by an increase in life expectancy and the projected old-age dependency ratio.
- The decline in the British (UK) score was primarily caused by the removal of any requirement for retirees to purchase an annuity. The expected increased coverage from auto enrolment to occupational pension plans has not yet come through in the international data.
- The decline in the American (USA) score was primarily caused by increasing life expectancy and a lower estimate of funding from social security contributions.
Pension fund assets
Labour force participation rate at older ages
|Overall Index India|
- The overall index value for the Indian system could be increased by:
- introducing a minimum level of support for the poorest aged individuals
- increasing coverage of pension arrangements for the unorganised working class
- introducing a minimum access age so that it is clear that benefits are preserved for retirement purposes
- improving the regulatory requirements for the private pension system
- continuing to improve the required level of communication to members from pension arrangements
- increasing the pension age as life expectancy continues to increase
- increasing the level of contributions in statutory pension schemes
Read full report click here
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