The country’s retirement system ranks last in the global pension index, says a study by global consulting major Mercer.

Highlights

• The National Pension System (NPS), which was launched by the government in June as part of Pradhan Mantri Jan Dhan Yojana, will help the country improve its index.
•  Melbourne Mercer Global Pension Index (MMGPI) report  said the country’s index value fell from 43.5 in 2014 to 40.3 in 2015, primarily due to a recent review conducted by the economic intelligence unit that showed a material reduction in its household savings rate.
• Enhanced participation in the National Pension System will help the country increase its index value, it added. Denmark has been rated as the country with the best retirement system in the world. Australia, Germany, Japan, Singapore and the UK have increased their pension age to offset the increase in life expectancies.
• Now in its seventh year, the MMGPI measured 25 retirement income systems against more than 40 indicators, under the sub-indices of adequacy, sustainability and integrity.
• The report covers close to 60 per cent of the world’s population and suggests how governments can provide adequate and sustainable benefits that protect their citizens, against longevity risk.
• The report rated Denmark as the country with the best retirement system for the fourth consecutive year in 2015, with an overall score of 81.7. However, it said that the Indian retirement system continues to rank last.
•  Continuing to improve education and communication will help increase coverage of pension arrangements for the working population in the organised sector, particularly popularising the corporate model of NPS among Indian employers,” Anil Lobo, India Business Leader for Retirement, Mercer India, said in a statement.
• “The government’s recent initiative, giving thrust to the participation of individuals from the unorganised sector by launching the Atal Pension Yojana (APY) in June, should encourage workers in the unorganised sector to voluntarily save for retirement.

Expected Questions

What is MMGPI?

According to  Melbourne Mercer Global Pension Index which country has been rated as the country with the best retirement system in the world?