You are here
CPF can be improved by opening up to non-residents: Mercer
SINGAPORE is top in Asia when it comes to pension schemes, but there is room for improvement for the Central Provident Fund (CPF) if it opens up to non-residents who form one-third of the labour force.
According to the findings of the Melbourne Mercer Global Pension Index released on Monday, the Republic scored a B rating, climbing 2.4 points from 2016 to 69.4 points this year.
Garry Hawker, Mercer's Asia Zone Wealth Business coordinator, director of Strategic Research, Growth Markets, said: "The overall index value for the Singaporean system could be further increased by reducing the barriers to establishing tax-approved group corporate retirement plans; opening CPF to non-residents who comprise more than one-third of the labour force, and increasing the labour force participation rate at older ages as life expectancies rise."
This year's index, which is into its ninth edition and covered 30 countries, revealed that Denmark, for the sixth year running, has retained the top position with an overall score of 78.9, ahead of the Netherlands and Australia at 78.8 and 77.1 respectively.
Mercer added that China (46.5), India (44.9) and Malaysia (57.7) are among countries that have seen a significant improvement in their index value and have had high real economic growth during the last three years.
For developed economies such as Japan, Austria, Italy and France, the pension systems don't represent a sustainable model that will support current and future generations in their old age.
Jacques Goulet, president of Health and Wealth at Mercer, stressed the need for countries to address sustainability when considering pension reform.
"Increasing life expectancies and low investment returns are having significant long-term impacts on the ability of many systems around the world to deliver adequate retirement benefits both now and into the future. These pressures have alerted policymakers to the growing importance of intergenerational equity issues," he said.