India, which had been performing poorly on the 28-nation Melbourne Mercer Global Pension Index, showed some improvement in 2017, but continues to remain at the bottom three. India, which was earlier ranked last in 2015, climbed up to 25th position among 27 countries in 2016 and 28th position among 30 countries in 2017.
According to the report, India is among countries which have shown improvement in their value due to the economic growth in the last three years, and is also expected to grow in the coming three years. India’s overall index value has increased from 43.4 in 2016 to 44.9 in 2017, but the report states that despite having some desirable features, if India fails to address its weakness, the efficacy and sustainability are in doubt. Denmark has topped the index for the sixth time this year with a value of 78.9.
While India is improving on the pension index, developed nations such as like Japan, Austria, Italy, and France do not represent a sustainable model that will support current and future generations, the report noted. China and Mexico are among the countries which have been put in the same category, but have shown a lower improvement as compared to India.
Introduction of schemes such as Pradhan Mantri Vaya Vandana Yojana, the report said, have played a role in improving India’s position this year. “The extension of pension benefits to the unorganised sector and schemes like Pradhan Mantri Vaya Vandana Yojana (PMVVY), a simple scheme with assured pension of 8%which will provide some amount of protection to elderly persons aged 60 years and above against interest rate risk as a result of uncertain market conditions, are some steps in the right direction…” Preeti Chandrashekhar, India Business Leader – Retirement, Health and Benefits, Mercer said.
India needs to work on 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.
This year, it is the ninth edition of the Melbourne Mercer Global Pension Index measuring 30 countries and covering 60% of the world’s population urged countries with unsustainable pension systems to take action now, rather than risk the need to take even more drastic action in the future.