KUALA LUMPUR: Malaysia's retirement system has been ranked third in Asia and 23rd globally despite a slight decrease in the country's overall index value from 60.1 in 2020 to 59.6 in 2021, the 13th annual Mercer CFA Institute Global Pension Index (MCGPI) revealed.
The study of 43 retirement income systems across the globe, which measures each retirement system through three weighted sub-indices (adequacy, sustainability and integrity) includes four new systems - Iceland, Taiwan, UAE and Uruguay.
Of the three sub-indices measured in the 2021 Global Pension Index, Malaysia saw an improvement in its adequacy score to 50.6 this year. The country scored highest for integrity (76.8), followed by sustainability (57.5) and adequacy, it said.
Malaysia is ranked 15th for the sustainability sub-index, which measures the likelihood of the system's ability to provide benefits in the future; 20th for integrity, where factors which affect the citizens' confidence in the retirement system are considered; and 34th for adequacy, which considers how the country's system is designed to provide adequate retirement benefits, a statement on the study said today.
Janet Li, Mercer's Wealth Business Leader for Asia, said: "It is encouraging that Malaysia continued to achieve scores that were well above the Asia average in each of the three sub-indices. As life expectancy continues to rise, the government can look at ways to increase the minimum level of support for the poorest retirees as well as the labour force participation rate, especially at older ages."
"If Malaysia can also raise the level of household savings and lower the level of household debt, it will help boost both the adequacy and sustainability scores, and eventually the overall index value for its retirement system."
However, Justin Ong, president of CFA Society Malaysia, said, "The ongoing COVID-19 pandemic has made it even harder for Malaysians to retire peacefully. Less for more is a global trend, where low interest rates and an increasing life expectancy have put unprecedented pressure on both public and private pension systems around the world. In Malaysia, the issue is further exacerbated by inadequate financial literacy among Malaysians."
Malaysia went from a C+ rating to a C grade this year, connoting a pension system that has some good features, but also major risks or shortcomings that should be addressed. The Malaysian system achieved the same grade as a number of other Asian economies like China, Indonesia and Taiwan.
The 2021 Global Pension Index also found that Asia's retirement systems continue to lag the world's. Asia's overall index value average was 52.2, against a global average of 61.
Globally, Iceland's retirement income system (84.2) has been named the world's best in its debut, closely followed by the Netherlands (83.5) and Denmark (82).
For each sub-index, the systems with the highest values were Iceland for adequacy (82.7) and sustainability (84.6) and Finland for integrity (93.1). The systems with the lowest values across the sub-indices were India for adequacy (33.5), Italy for sustainability (21.3) and the Philippines for integrity (35.0).
The Global Pension Index is a collaborative research project sponsored by CFA Institute, the global association of investment professionals, in collaboration with the Monash Centre for Financial Studies, part of Monash Business School at Monash University, and Mercer, a global leader in redefining the world of work and reshaping retirement and investment outcomes.
-- BERNAMA
Bernama
Tue Oct 19 2021
The study of 43 retirement income systems across the globe, which measures each retirement system through three weighted sub-indices (adequacy, sustainability and integrity) includes four new systems - Iceland, Taiwan, UAE and Uruguay. - AWANI
Former special forces commander Prabowo to take up Indonesian presidency
Indonesia's Prabowo Subianto will take over as president of the world's third-largest democracy after sweeping the country's election with policies like free meals for school children
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Trump says he would impose tariffs on China if China went into Taiwan
Republican presidential candidate Donald Trump said he would impose additional tariffs on China if China were to "go into Taiwan,"
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.