Singapore slips one spot to 28th in global ranking of retirement security
Switzerland unseats Norway at the top of Natixis global retirement index which covers 18 performance indicators
Singapore
SINGAPORE slipped one spot to 28th place among 43 countries in the latest annual edition of a retirement security index.
The city-state came in third for countries in Asia, behind Japan and South Korea, which placed 22nd and 24th respectively in the global ranking, according to the Natixis Investment Managers' Global Retirement Index for 2018.
The index incorporates 18 performance indicators that examine the factors driving retirement security. The performance indicators are grouped into four thematic sub-indices, which cover key aspects for welfare in retirement: the material means to live comfortably; access to quality financial services to help preserve savings value and maximise income; access to quality health services; and a clean and safe environment.
In the retirement finances sub-index, Singapore was knocked down to second place by New Zealand. Singapore lost the top spot due to lower indicator scores for government indebtedness, bank non-performing loans, old-age dependency and governance. New Zealand, to a lesser extent, also declined in some of these indicators, but this was offset by gains in the tax pressure indicator.
Despite the relatively strong score in retirement finances, Singapore's rank was pulled down by the other sub-indexes.
In particular, the quality of life sub-index saw Singapore fall from 34th place to 39th - one of the biggest declines globally. This is mainly due to declines in air quality, biodiversity and environmental factors. In happiness scores, Singapore ranked in the middle of the pack, and there was no decline in the water and sanitation indicator.
Singapore also had mediocre performance in the remaining two sub-indexes, coming in 29th place for both health and material well-being.
Overall, the countries in the top five remained the same as last year, but there was movement in the rankings.
Switzerland dethroned Norway at the top, with the latter falling two places. Iceland moved up one rank to second place. Sweden and New Zealand rounded off the top five.
According to the report, the majority of the high-scoring countries in this year's index are relatively prosperous with advanced economies and institutions people generally trust.
Six of the top 10 had high income per capita scores, and seven are in the top 10 for governance. The countries in the top 10 also benefit from three strong main factors: their social programmes, widely accessible healthcare and low levels of income inequality.
The report listed five critical threats to global retirement security: monetary policy, public debt, demographics, climate change, and quality of life.
A decade of ultra-low interest rates has widened the pension gap in many countries, resulting in mounting liabilities and forcing retirees to annuitise savings on unfavourable terms.
Public spending has also continued near pre-crisis levels, straining resources to be allocated to government pensions and social services, while ageing populations around the world have led to unpopular discussions about reduced pension payouts and questions on effective immigration policy.
Climate change has also led to rising temperatures and sea levels that increase health, safety and insurance risks for retirees. Finally, shifting employment dynamics, rising healthcare costs, and increasing environmental pressures all affect the security of retirees around the world.
The report showed areas where Singapore's performance in retirement security could improve.
For example, relative to the other countries surveyed, a larger portion of Singapore's healthcare expenditure is not covered by insurance, even while Singaporeans have the seventh-highest life expectancy.
Madeline Ho, executive managing director and head of wholesale fund distribution, Asia Pacific, at Natixis Investment Managers, said: "The index points to a generally favourable financial infrastructure that provides long-term financial strength and stability, which is extremely important for the finances of retirees."
She added that the relatively stable macro socio-economic environment in Singapore over the years has made it "conducive" for Singaporeans to take stronger ownership in planning for their retirement.
