SINGAPORE: Singapore has the best retirement income system in Asia with its Central Provident Fund (CPF) but there is still room for improvement, wealth consulting firm Mercer said in a media release on Monday (Oct 23).
Calculated on its adequacy, sustainability and integrity, the 2017 Melbourne Mercer Global Pension Index revealed that Singapore's index value of 69.4 has increased by 2.4 points from last year.
Measured against 30 countries, the index puts Denmark at the top of table for the sixth consecutive year.
With its B grade, Singapore has made continuous improvements through CPF by "providing more flexibility to its members", said Garry Hawkers, Mercer's Asia zone wealth business coordinator.
In 2016, the Government made changes to the system which included providing minimum CPF top-up amounts for the poorest individuals, more flexibility in drawing down retirement amounts and increases to certain contribution rates and interest guarantees.
However, there are ways in which the Singapore system could strengthen its index score, said Hawkers.
"The overall index value for the Singaporean system could be further increased by reducing the barriers to establishing tax-approved group corporate retirement plans; opening CPF to non-residents who comprise more than one third of the labour force and increasing the labour force participation rate at older ages as life expectancies rise," explained Hawkers.
No countries have achieved the elusive 'A' grade for the index since the introduction of two new questions. The first question addresses real economic growth in the sustainability sub-index, while the second question makes some allowance for voluntary pensions.
"We know there is no perfect system that can be applied universally, but there are many common features that can be shared for better outcomes,” said author of the report Dr David Knox.
http://www.channelnewsasia.com/news...-pension-systems-in-asia-mercer-index-9335236
Calculated on its adequacy, sustainability and integrity, the 2017 Melbourne Mercer Global Pension Index revealed that Singapore's index value of 69.4 has increased by 2.4 points from last year.
Measured against 30 countries, the index puts Denmark at the top of table for the sixth consecutive year.
With its B grade, Singapore has made continuous improvements through CPF by "providing more flexibility to its members", said Garry Hawkers, Mercer's Asia zone wealth business coordinator.
In 2016, the Government made changes to the system which included providing minimum CPF top-up amounts for the poorest individuals, more flexibility in drawing down retirement amounts and increases to certain contribution rates and interest guarantees.
However, there are ways in which the Singapore system could strengthen its index score, said Hawkers.
"The overall index value for the Singaporean system could be further increased by reducing the barriers to establishing tax-approved group corporate retirement plans; opening CPF to non-residents who comprise more than one third of the labour force and increasing the labour force participation rate at older ages as life expectancies rise," explained Hawkers.
No countries have achieved the elusive 'A' grade for the index since the introduction of two new questions. The first question addresses real economic growth in the sustainability sub-index, while the second question makes some allowance for voluntary pensions.
"We know there is no perfect system that can be applied universally, but there are many common features that can be shared for better outcomes,” said author of the report Dr David Knox.
http://www.channelnewsasia.com/news...-pension-systems-in-asia-mercer-index-9335236
