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From 2022, India’s Pension System Will Improve: Report

<p>Despite considerable progress since last year, India’s retirement system was placed 45th out of the 47 retirement income schemes examined, according to a study released on Tuesday.<img decoding=”async” class=”alignnone wp-image-242796″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/10/theindiaprint.com-making-plans-for-a-future-investment-instead-of-fds-think-about-these-options-for-.jpg” alt=”theindiaprint.com making plans for a future investment instead of fds think about these options for” width=”1078″ height=”647″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/10/theindiaprint.com-making-plans-for-a-future-investment-instead-of-fds-think-about-these-options-for-.jpg 290w, https://www.theindiaprint.com/wp-content/uploads/2023/10/theindiaprint.com-making-plans-for-a-future-investment-instead-of-fds-think-about-these-options-for–150×90.jpg 150w” sizes=”(max-width: 1078px) 100vw, 1078px” title=”From 2022, India's Pension System Will Improve: Report 3″></p>
<p>According to the 15th annual Mercer CFA Institute Global Pension Index (MCGPI), India’s overall index value increased from 44.5 in 2022 to 45.9 in 2018, placing it 45th out of the 47 retirement income systems examined. This development was largely driven by improvements in the adequacy and sustainability sub-indices.</p>
<p>The Netherlands, Iceland, and Denmark were the next three countries with the highest overall index values (85.0, 83.5, and 81.3 respectively). It continued that Argentina had the lowest index value (42.3).</p>
<p>The Global Pension Index for this year analyzes 47 retirement income schemes from all around the world, serving 64% of the global population.</p>
<p>Each retirement system is compared to more than 50 factors by the Global Pension Index, which weights the subindices of adequacy, sustainability, and integrity. Three new retirement income systems from Botswana, Croatia, and Kazakhstan are included in the 2023 Global Pension Index.</p>
<p>The survey also showed that, over the long run, declining birth rates have placed strain on a number of economies and pension systems, which has had a negative impact on the sustainability rankings for nations like Italy and Spain.</p>
<p>However, in the previous five years, changes have been implemented in a number of Asian systems, including mainland China, Korea, Singapore, and Japan, to raise their rankings.</p>
<p>According to the research, India’s retirement income system consists of a defined contribution (DC) employee provident fund (EPFO), an earnings-related employee pension scheme, and other employer-managed pension plans that are mostly DC in form.</p>
<p>According to the study, the government programs have been introduced as a component of the universal social security program with the goal of assisting the unorganized sector.</p>
<p>“Changes in job, family, and labor relationships have made official sources of retirement more prominent. The coverage of the Indian workforce under private pension plans is still incredibly low (6%) despite improvements in the net pension replacement rate and participation, which are reflected in the value of adequacy and sustainability sub-indices, according to Preeti Chandrashekhar, Mercer’s Health and Wealth, India Business Leader.</p>
<p>Given that India lacks a mandatory public pension program with contributions based on earnings that aims to replace some pre-retirement income, she said that expanding the Social Security System’s coverage of the unorganized workforce and the self-employed would further increase the system’s effectiveness.</p>
<p>“There is an increasing emphasis on transforming India into a fully pensionable society, and the government has taken a number of actions in this direction. Greater levels of private savings would be stimulated by making it easier to participate in private pensions.</p>
<p>Focusing on financing gratuity programs and enhancing member communication in terms of information dissemination will both significantly enhance governance and the value of the index as a whole. The findings of this year’s Mercer CFA Institute Global Pension Index demonstrate that India’s pension system is steadily improving and has more room for growth,” she said.</p>

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