India’s rank on Global Pension Index falls to 45 out of 47 countries

India dropped from the 41st position out of 44 countries in the 2022 Global Pension Index to the 45th spot out of 47 countries in 2023.

The index was released by the United States-based consulting company Mercer and not-for-profit organisation CFA Institute on Tuesday. It comprises three sub-indices – adequacy, sustainability and integrity – to measure retirement income systems in 47 countries across over 50 indicators.

The first sub-index shows the adequacy of the benefits being provided and the sustainability sub-index represents the likelihood that the current pension system would be able to provide benefits in the future. The integrity sub-index includes legislative requirements that influence the overall governance and operations of the pension system, and shows the level of confidence of citizens in it.

India’s score improved marginally from 44.4 last year to 45.9 now. The report primarily attributed this to an improvement in the adequacy sub-index.

“India’s retirement income system comprises an earnings-related employee pension scheme, a DC [defined contribution] employee provident fund [EPFO] and supplementary employer-managed pension schemes that are largely DC in nature,” the report noted. “Government schemes have been launched as part of the universal social security program aimed at benefiting the unorganised sector.”

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