New Delhi: India, China Japan and South Korea are among the
worst-ranked countries on Pension system,
while Denmark has the world’s best pension system,
followed by Australia and the Netherlands, a survey by
consultants Mercer released on Monday showed.
The United States scored a C, with 57.9
out of 100 points, in the global Pensions Index of 25 countries, on par
with France,
Poland and South Africa.
The top three scorers retained their
positions from 2013, with 82.4 for Denmark, 79.9 for Australia, and 79.2 for
the Netherlands.
The rankings are based on factors such as adequacy,
sustainability and integrity of the retirement
income system.(survey report)
Britain ranked ninth, below Sweden, Canada and Chile, the annual
survey showed.
China, India, Indonesia and South Korea
fared among the worst, with scores of 35 to 50, as their retirement income
systems are in the early stages of development.
The Indian statutory
retirement age is 60 for men and
women, while Denmark has raised the retirement age to 67 from 65 for citizens born in 1955 or
later, while it will be hiked further for those born after 1962.
Britain’s plan to abolish a 55 percent tax
levied on pension savings is likely to hurt the
country’s global pension ranking next year, Mercer said.
Britain improved its ranking this year,
with a score of 67.6 versus 65.4 in 2013, helped by “higher contributions
through the continued introduction of auto enrolment,” Mercer
said.
“The results highlight that
introducing mandatory auto-enrolment can contribute to the UK’s efforts in
ensuring an adequate and sustainable retirement system,” said Deborah Cooper,
partner at Mercer.
Citing
proposals by UK Chancellor of the Exchequer George Osborne, Mercer cautioned
that radical reforms to abolish restrictions on accessing pension savings
before the age of 55 would “likely negatively impact on the UK score next
year.”
Osborne caught Britain’s pensions
industry by surprise in March when he said
he would scrap a rule forcing many people to buy an annuity, a Financial product which
converts a retiree’s pension pot into a guaranteed income.
As
of April, people will also face much less of a tax penalty if they access their
pension savings early at the age of 55.
The study is published by the
Australian Centre for Financial Studies
(ACFS) in conjunction with Mercer and is funded by the Victorian State Government.
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