Canada's rating revealed
Mercer has recently released its Mercer CFA Institute Global Pension Index (MCGPI) which evaluated the retirement systems of 52 countries, with Canada tied with New Zealand for the 15th spot, according to Bloomberg.
In the report, it was found that the Netherlands maintained its place as the top-ranking country with an A rating as its overall score sat at 85.4. Other countries that also had an A rating were Iceland, Denmark, Singapore, Israel, Sweden, Australia, Chile, Finland, and Norway.
The ratings were scored based on three metrics which were Adequacy (benefits, government support, growth assets, home ownership, savings and system design), Sustainability (demographics, economic growth, government debt, pension coverage, public expenditure, and total assets), and Integrity (communication, governance, operating costs, protection and regulation), according to Plansponsor.com.
A ratings were given to those that had an index value that was greater than 80. B+ was given to those who had a score between 76 to 80, B for those who scored between 66 to 75, C+ for those between 61 to 65, C for those between 51 to 60, D for those between, 35 to 50, and E for those less than 35. No country has received an E grade.
Notably, this was the first time Singapore reached an A-grade, which highlighted its efforts in strengthening its pension system. Its system is built around the Central Provident Fund, which takes mandatory contributions from workers and employers, subsequently covering all of its employed citizens and permanent residents. Recent efforts to improve the system involved boosting transparency to help people understand what they will receive upon retirement.
Tim Jenkins, the lead author of the report and a partner at Mercer in Sydney, had pointed out Singapore’s steady growth since 2009, where it only had a C rating. Last year, the country had a B+ rating.
“Singapore has gone all the way from C-grade to A-grade. The economy in Singapore has also helped,” said Jenkins.
Meanwhile, both Canada and New Zealand were given a B rating with a score of 70.4. The US ranked 30th out of 52, with a score of 61.1 and a C+ rating. The UK took the 12th spot with a score of 72.2 and a B rating. Japan was 39th, with a score of 56.33 and a C rating. The country that had the lowest ranking was India, with a D rating and a score of 43.8.
