India's pension system showing steady improvement: report

New Delhi: India has been ranked 28 out of the 30 countries under review in the Melbourne Mercer Global Pension Index 2017, which was topped by Denmark for the sixth straight year.

According to the index, India's overall index value has increased from 43.4 in 2016 to 44.9 in 2017 and its pension system is found to be more sustainable than that of Poland, Germany, France, Japan, Italy, Austria, Brazil, China and Argentina.

India's position in sub-index value under sustainability increased from 40.9 to 43.8 in 2017.

"The increase in value under the integrity sub-index from 53.4 to 55.1 is a reflection of Government of India's continued efforts to improve the transparency and member experience in various schemes," Preeti Chandrashekhar, India Business Leader Retirement, Health and Benefits, Mercer said Chandrashekhar further said, "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 per cent 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..."

Moreover, government of India and PFRDA (the pension regulator) have also provided much required impetus and thrust in encouraging participation in the National Pension System both in the organised and unorganised sector by its sustained campaigns and tax incentives.

"The National Pension System is slowly gaining popularity. All these measures should help India to increase its index value in coming years," Chandrashekhar said.

This year's ninth edition of the Melbourne Mercer Global Pension Index measuring 30 countries and covering 60 per cent 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.

Jacques Goulet, President of Health and Wealth at Mercer, said Japan, Austria, Italy, and France are examples of developed economies whose pension systems don’t represent a sustainable model that will support current and future generations in their old age.

"The Index is an important reference for policy makers around the world to learn from the most adequate and sustainable systems," author of the report and Senior Partner at Mercer, Dr David Knox said.