In an official announcement made by global financial consultancy firm, Mercer, last Oct. 23, Singapore ranked no. 1 among Asia’s best pension systems.
The 2017 Mercer Global Pension Index showed a 2.4 increase in Singapore’s index value at 69.4, equivalent to a B grade, which is head and shoulders above the global average of 59.9 points. The global pension index report was calculated based on integrity, adequacy, and sustainability of a country’s pension system, and was measured against 30 participating countries, wherein Denmark landed the top spot in the world for its 6th year in a row.
Singapore leads Asia in Pension Systems – Mercer Index
Garry Hawkers, Mercer’s Asia zone Wealth Business coordinator, attributes the country’s impressive performance to the government’s efforts at improving the system of the Central Provident Fund (CPF) through “providing more flexibility to its members.”
Last 2016, some key changes made by the Government on the CPF system included setting minimum top-up amounts for those who belong in the marginalized sector of society as well as allowing for more options in drawing from retirement assets, and increases in contribution rates for older members and interest rate guarantees.
While Singapore’s overall index value has been positive, Hawkers sees more room for improvement in the CPF system. By eliminating the hindrances to setting up tax-approved group corporate pension plans, making the CPF available to non-residents, who, by estimate, comprise around one-third of the Singaporean workforce, and adjusting the labour force participation age ceiling in line with the increasing life expectancy rates, the overall index assessment for the country’s pension system could still be significantly improved according to Hawkers.