KUALA LUMPUR: Malaysia’s retirement system has been ranked third in Asia and twenty third globally regardless of a slight lower within the nation’s general index worth from 60.1 in 2020 to 59.6 in 2021, the thirteenth annual Mercer CFA Institute World Pension Index (MCGPI) revealed.
The research of 43 retirement earnings programs throughout the globe, which measures every retirement system by means of three weighted sub-indices (adequacy, sustainability and integrity) contains 4 new programs – Iceland, Taiwan, UAE and Uruguay.
Of the three sub-indices measured within the 2021 World Pension Index, Malaysia noticed an enchancment in its adequacy rating to 50.6 this yr. The nation scored highest for integrity (76.8), adopted by sustainability (57.5) and adequacy, it stated.
Malaysia is ranked fifteenth for the sustainability sub-index, which measures the probability of the system’s potential to supply advantages sooner or later; twentieth for integrity, the place elements which have an effect on the residents’ confidence within the retirement system are thought of; and thirty fourth for adequacy, which considers how the nation’s system is designed to supply ample retirement advantages, an announcement on the research stated right now.
Janet Li, Mercer’s Wealth Enterprise Chief for Asia, stated: “It’s encouraging that Malaysia continued to realize scores that have been effectively above the Asia common in every of the three sub-indices. As life expectancy continues to rise, the federal government can take a look at methods to extend the minimal degree of assist for the poorest retirees in addition to the labour power participation price, particularly at older ages.”
“If Malaysia also can increase the extent of family financial savings and decrease the extent of family debt, it can assist increase each the adequacy and sustainability scores, and finally the general index worth for its retirement system.”
Nevertheless, Justin Ong, president of CFA Society Malaysia, stated, “The continuing COVID-19 pandemic has made it even tougher for Malaysians to retire peacefully. Much less for extra is a world pattern, the place low rates of interest and an growing life expectancy have put unprecedented stress on each private and non-private pension programs world wide. In Malaysia, the difficulty is additional exacerbated by insufficient monetary literacy amongst Malaysians.”
Malaysia went from a C+ score to a C grade this yr, connoting a pension system that has some good options, but additionally main dangers or shortcomings that needs to be addressed. The Malaysian system achieved the identical grade as plenty of different Asian economies like China, Indonesia and Taiwan.
The 2021 World Pension Index additionally discovered that Asia’s retirement programs proceed to lag the world’s. Asia’s general index worth common was 52.2, in opposition to a world common of 61.
Globally, Iceland’s retirement earnings system (84.2) has been named the world’s finest in its debut, carefully adopted by the Netherlands (83.5) and Denmark (82).
For every sub-index, the programs with the very best values have been Iceland for adequacy (82.7) and sustainability (84.6) and Finland for integrity (93.1). The programs with the bottom values throughout the sub-indices have been India for adequacy (33.5), Italy for sustainability (21.3) and the Philippines for integrity (35.0).
The World Pension Index is a collaborative analysis undertaking sponsored by CFA Institute, the worldwide affiliation of funding professionals, in collaboration with the Monash Centre for Monetary Research, a part of Monash Enterprise College at Monash College, and Mercer, a world chief in redefining the world of labor and reshaping retirement and funding outcomes. – Bernama
