A recent report titled, ‘Melbourne Mercer Global Pension Index (MMGPI) 2015 reveals that the exposure of pension funds to growth assets, which includes property and equity, is less than 10% in India. This is followed by Korea and Singapore. In contrast, pension funds’ exposure to growth assets is 70% in Australia and South Africa.
The survey was conducted in 25 countries which covers almost 60% of the world.
Indians are not confident when it comes to their retirement savings. The report shows that the Indian pension index value fell from 43.5 in 2014 to 40.3 in 2015 primarily due to a drop in household savings rate.
The report shows that Indians prefer to invest more in fixed deposits than other assets to save for their retirement. Rajesh Hattangady of Thiink had earlier told Cafemutual, “People have been traditionally depositing money in banks. They consider it safer than any other product.”
“Traditionally, retirement planning was never a priority for Indians. This has changed gradually as now more people are educated through investor awareness programs,” points out Bhushan Mahajan of Arthbodh Investments.
The MMGPI has used three sub-indices - adequacy, sustainability and integrity to measure India’s retirement income. India has the lowest index value for all the three sub-indices.
