The Melbourne Mercer Global Pension Index (MMGPI) report 2015 reveals that India ranks last in global pension index while Denmark received the distinction of having the best retirement system globally.
Denmark has been rated as the country with the best retirement system for the fourth consecutive year, with an overall score of 81.7. Denmark and the Netherlands are the only countries to achieve an “A” grade in the index. Singapore ranks the highest in Asia.
The Indian pension index value fell from 43.5 in 2014 to 40.3 in 2015 primarily due to a drop in the household savings rate, shows the report. India has been graded ‘D’ in the index which means that the retirement system has some good features but has major weaknesses that need to be addressed. China, Korea, Japan and Indonesia are also included in the D group.
The survey was conducted in 25 countries which covers almost 60% of the world’s population.
The National Pension system (NPS) is gradually gaining popularity in India. It is still in its nascent stage and needs to be promoted in both organised as well as un-organized sectors, say distributors.
The report has suggested some measures to improve India’s retirement saving system:
- 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 and continuing 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
