Singapore pension system now ranked top ten in the world

Based on latest Global Pension Index.

Singapore outshined most other Asian countries in the Melbourne Mercer Global Pension Index in 2013, with the country improving its overall score from 54.8 in 2012 to 66.5 in 2013. The score increase pushes Singapore's pension system into the top ten in the world.

Across the region, Singapore plus three other Asian countries improved or maintained their performance. Meanwhile, South Korea’s score fell primarily due to a significant increase in life expectancy as measured by the United Nations, and Indonesia was included in the Index for the first time.

"The overall results indicate pension systems in the region are improving. However, five out of six also maintained a ‘D’ grade which is a system with some desirable features but also many opportunities to improve," said Mercer in a release accompanying the data results.

Dr David Knox, Senior Partner at Mercer and author of the research said, “Pension systems in many Asian countries are in an embryonic phase and we expect them to gradually strengthen in coming years. However, many Asian countries are also facing an ageing population at a rate beyond some Western countries, which makes it particularly challenging, and urgent, to develop a sustainable pension system.”

Sustainability is proving to be biggest challenge for Asian pension systems, noted Mercer, which will require the countries to think long and hard on how to construct adequate post-retirement solutions.

The Melbourne Mercer Global Pension Index is now in its fifth year and has increased from 11 countries in 2009 to 20 countries in 2013 with Mexico and Indonesia the latest additions. It now covers more than 55% of the world’s population.

Asian countries made up 30% of the Index - or six out of 20 countries - with Singapore, China, Japan, South Korea, India, and Indonesia included.

The Index looks objectively at both the publicly funded and private components of a system as well as personal assets and savings outside the pension system.

It measures the adequacy, sustainability and integrity of a country’s pension system and is published by the Australian Centre for Financial Studies (ACFS) in conjunction with Mercer and is funded by the Victorian State Government.