PH Retirement System Ranks 2nd Worst in the World

The retirement income system of the Philippines is ranked second worst from a list of 44 economies according to the Mercer-CFA Institute’s Global Pension Index citing inadequate pensions for retirees.

The Philippines remains ahead only of Thailand.

The Philippines was also given an overall grade of “D” as the index value went down to 42 this 2022 from last year’s 42.7 “primarily due to some minor adjustments.”

With the grade of “D”, this means would the pension system has  “some desirable features but also has major weaknesses and/or omissions that need to be addressed.”

Other countries that likewise received a grade of D include Indonesia, Turkey, India, Argentina, and Thailand.

Of the ten Asia-Pacific countries included in the list, Singapore ranked the best followed by Hong Kong and Malaysia.

The best retirement income system in the list goes to Iceland, with a score of 84.7, followed by the Netherlands with 84.6, and Denmark with 82. These three countries are the only countries given a grade of A.

The Global Pension Index evaluates retirement systems with three weighted sub-indices: integrity, sustainability, and adequacy.

In integrity, the Philippines’ score went down to 30 from 35 last year, which is the lowest among the 44 countries in the index. Integrity takes into account the system’s protection for members, operating costs, and regulation and governance.

Regarding sustainability, the Philippines ranked 23 in this sub-index with 52.3 despite being lower than last year’s 52.5 and below the global average of 53.5.

The retirement income system of the Philippines includes a small basic pension and an earnings-related social security system.

Source: Business World