Singapore scored a B on the global scale of treating its retirees right. It is the best country in Asia to guarantee financial security for retirees, according to the Melbourne Mercer Global Pension Index.
Singapore scored 70.4 out of 100 which is ahead of the global average of 60.5. It has consistently improved its performance since 2015 with a score of 69.4 in 2017, according to the report. The index measures the ranking of the retirement income system in a particular country on these parameters: Adequacy, Sustainability and Integrity. Singapore scored better thanks to its enhancements on the sustainability front.
B grade is allotted to the country whose retirement and Central Provident Fund (CPF) is “a system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.”
Scores of various retirement income systems range from 80.3 for Netherlands who scored an A grade to 39.2 for Argentina who scored a D grade.
Medical research is proof that life expectancy continues to rise. That’s why the average retirement age can be increased so that the employees can work for longer and be in the active workforce for more years, suggests the report. For Singapore, the recommendation is to increase the Central Provident Fund (CPF) withdrawal age.
The report suggests countries to build a “better pension system” in a way that the framework provides employees a chance to have a sustainable retirement income. Solely relying on the government for their retirement is not a sustainable approach. Savings should be spread across “both inside and outside pension funds.”
A major concern is when employees choose to tap into their retirement funds prior to their actual retirement. The Mercer’s report has asked countries to reduce access to such benefits so that employees can still ensure sustainable retirement incomes during retirement years.