India retirement system ranks last in pension index

Denmark has the best retirement system for the fourth consecutive year in 2015, with an overall score of 81.7. The primary reasons for Denmark’s top spot is its well-funded pension system with its good coverage, high level of assets and contributions, the provision of adequate benefits and a private pension system with developed regulations, according to a report titled Melbourne Mercer Pension Index (MMGPI) report 2015. Denmark and the Netherlands are the only countries to achieve an ‘A’ grade in the history of the index. Singapore has been ranked the highest among Asian countries for a retirement system. The Indian retirement system continues to rank last, as per the report.

“The National Pension System (NPS) is gradually gaining popularity in India. 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,” says Anil Lobo, India business leader for retirement, Mercer India.

The Central government’s recent initiative, giving thrust to the participation of individuals from the unorganised sector by launching the Atal Pension Yojana (APY) in June is expected to encourage workers in the unorganised sector to voluntarily save for retirement.