2022 Mercer CFA Institute Global Pension Index survey (MCGPI)
The 2022 Mercer CFA Institute Global Pension Index survey (MCGPI) was released recently.
- Iceland topped the list, scoring the highest overall index value of 84.7.
- The second and third positions are held by the Netherlands (84.6) and Denmark (82.0) respectively.
- Thailand is the worst performer in the index, with an overall value of 41.7.
- India stood at the 41st rank out of 44 countries in the index. In the previous edition, it held the 40th position out of 43 countries.
- Portugal is the new entrant in the latest global ranking.
- India witnessed a marginal improvement with an increase in the overall index value from 43.3 in 2021 to 44.4 in 2022. However, this score is lower than 45.7 in 2020.
- India’s scores in the three sub-indices adequacy, sustainability and integrity are 33.5, 41.8 and 61.0 respectively.
- India’s adequacy score has increased from 2021 because of the spike in net replacement rates and the revised scoring methodology to calculate minimum pension.
- However, the scores in “sustainability” and “integrity” have declined.
- The report recommended the expansion of coverage under private pension arrangements to boost the sub-indices adequacy and sustainability
- The regulatory framework can be strengthened to make private pension plans more reliable.
- The new labour reforms are expected to provide a framework that can increase participation in private pensions, thus encouraging higher levels of private savings.
- Once implemented, the labour codes will increase access to social security for unorganized workers, who account for 95 per cent of the total Indian workforce.
The MCGPI assesses the pension systems in various countries across the world. It benchmarks retirement income systems, highlights each of these systems’ shortcomings, and provides recommendations to ensure adequate and sustainable retirement benefits. It is made of three sub-indices – adequacy, sustainability and integrity – to assess each pension system against more than fifty indicators. This year’s edition assessed pension systems in 44 countries, which account for 65 per cent of the global population.
Category: Reports & Indexes Current Affairs
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