Top Five Nation which have weakest pension system
Greece is home to the weakest national pension system in the world, according to the Allianz Global Investors Pension Sustainability Index.
The index monitors the sustainability of national pension systems in 44 nations across the globe.
Greece, already facing bankruptcy, has an almost unsustainable level of sovereign debt, poor pension take-up, early retirement age and thus an ever increasing number of pensioners that has skewed its economy against the productive/working population.
In other words, Greece has far many more pensioners than working people. The results of this study show Greece to be in the greatest need for reform.
Not only does Greece have the worst ranking within Europe, it yields the highest score of all the countries considered in this study.
At the heart of Greece’s deteriorating ranking are acute sovereign debt, a quite serious aging problem and a still generous pension system, despite pension reforms initiated as a condition of IMF and ECB financing initiatives.
India has the second weakest pension system in the world.
The Pension Sustainability Index systematically examines relevant elements of pension systems in order to measure and evaluate the pressure on governments to reform their national pension systems. Moreover India’s New Pension system has not generated much enthusiasm in public because of volatile markets.
India is under the most reform pressure. Extremely low pension coverage in the country remains the primary challenge to India’s pension policy.
Adequate steps have yet to be implemented to see to it that pension coverage increases in India.
Only 12 per cent of the enormous Indian population of 1.21 billion is covered by any type of formal pension arrangement at all.
In China, like India, only about 12 per cent of the population contributes to a pension. China ranks third in terms of weakness in pension system.
The ratio of pensioners aged 65 and older to population aged 15-64 years is expected to top 40 per cent in China by 2050.
Comprehensive pension systems remain the exception rather than the rule across Asia, Allianz GI said.
Thailand has the world’s fourth weakest pension system. The weaknesses of Thailand’s pension system are compounded by an average retirement age of 55 years, compared with 65 years in most western European countries.
Like in China, the ratio of pensioners to the younger population is estimated to be over 40 per cent in by 2050.
Among the Asian countries, Japan ranks fourth — despite good pension coverage.
Japan is suffering from one of the highest old-age dependency ratios in the world. By 2050, it is expected to increase to an unsustainable level of almost 70 per cent, compared to 42 per cent in China.
Another factor influencing Japan’s unfavourable ranking is its high sovereign debt, which leaves no room for subsidizing the pension system should it become necessary.
Japan has the world’s fifth weakest pension system.