Moves like tax incentives for participation in the National Pension System and introduction of the Universal Account Number (UAN) for the Employees’ Provident Fund (EPF) have resulted in improvement in India’s index value in the Melbourne Mercer global pension index.
The index is published by the Australian Centre for Financial Studies in collaboration with Mercer, a consulting firm.
The index value for India has improved from 40.3 in 2015 to 43.4 in 2016 primarily due to an increase in the net replacement rate. This is a measure for adequacy of post-retirement income.
The rate is the percentage of an employee’s post-tax, pre-retirement income that is paid through post-tax, post-retirement annuities. In comparison, China ranked 23rd with an index value of 45.2.
