Mercer pension report gives India “D” grade

Blitz Bureau

NEW DELHI: India’s pension system has been ranked among the lowest in the world by Mercer CFA Institute Global Pension Index 2025.

India was awarded ‘Grade D’, alongside Turkey, Argentina, and the Philippines. The report said that these countries showed “some desirable features but major weaknesses that need urgent attention”.

India’s index value was reduced from 44 last year to 43.8 in 2025 as per the report, which evaluated 52 countries on three parameters: adequacy, sustainability and integrity, weighted at 40 per cent, 35 per cent and 25 per cent, respectively. India received Grade E on adequacy, and D and C on sustainability and integrity, the Telegraph reported.

The report recommended introducing a minimum income floor for the poorest elderly citizens, expanding pension coverage to informal workers and building pension assets over time, to increase India’s ranking.

The report also highlighted India’s assets-to-GDP ratio as a major concern. According to the Economic Survey 2024-25, the country’s total pension assets — comprising Employees’ Provident Fund Organisation (EPFO) holdings (17 per cent) and National Pension System (NPS) assets (4.5 per cent) — together account for just over 21 per cent of GDP. In comparison, OECD countries boast pension assets that exceed 80 per cent of GDP on average.

Meanwhile, Singapore ventured into the top tier of the global pension index for the first time by securing Grade A. Netherlands retained its position on number 1, accompanied by Iceland, Denmark and Israel in the top tier, the report said.

Singapore has steadily strengthened its pension system over the years, focusing on transparency and helping citizens better understand what they can expect in retirement, said Tim Jenkins, partner at Mercer, according to a Bloomberg report.

Macro-level gaps
The survey also flagged low awareness and poor financial literacy as barriers to expanding pension coverage, especially within the informal sector.

“A fundamental step in integrating a significant portion of the informal sector into the pension framework is raising awareness about pensions and financial literacy using modern, application-based interfaces that allow seamless access to these services,” the survey said.

There are also concerns about regulatory fragmentation, with the NPS falling under the Pension Fund Regulatory and Development Authority (PFRDA) under the finance ministry, while the EPFO operates under the labour ministry.
“A uniform regulator is essential for efficient oversight of the pension sector,” Atanu Sun, former chairman of NPS Trust and ex-MD & CEO of SBI Life Insurance, told The Telegraph.

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