Mercer 2014 Global Pensions Index

The Melbourne Mercer Global Pensions Index  (MMGPI)  is the most comprehensive comparison of pension systems globally currently reviewing 25 retirement systems (impacting 60% of the world’s population) against 50 indicators.

Australia has been recognised, in 2014, as having the second best retirement income system in the world (behind Denmark).   Australia’s jump in placings from third to second (over taking the Netherlands) was the result of the Superannuation Guarantee (SG) increasing from 9% to 9.5%, over the last 16 months, together with a planned (albeit now delayed) increase to 12%. The author of the report and senior partner at Mercer, Dr David Knox stated that increasing SG would be the right long term policy to ensure an adequate and sustainable retirement income system for all Australians.

Denmark holds the number one spot, with a system identified as being well funded, with good coverage, developed regulations, high levels of assets and contributions, with the provision of adequate benefits.

Trust and transparency were identified as key future requirements for continued success by Dr Knox, who states that for effective system “Governments, regulators and financial industries, have to ensure good governance frameworks and practices that promote regular, easy to understand communication, clear benefit projections, and access to comparative information in a cost efficient manner“.

Suggested measures for improving Australia’s system included:

  • Increasing labour force participation rates for older workers
  • Introducing mechanisms to increase the pension age as life expectancy increases
  • removing legislative barriers to encourage more effective retirement income products

 

 

 

 

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