Covid-19: More bad news for retirement adequacy
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EVEN with the vaccine appearing on the Singapore horizon, not all employees will be out of the woods. Unemployment, employees on furloughed schemes, shorter work weeks and lesser gig work brought on by the Covid-19 pandemic have affected employment income in 2020. For those adversely affected, contributions to public and private pension funds as well as personal savings plans would have been disrupted.
Unfortunately, there is more bad news on retirement adequacy. The 2020 Mercer CFA Institute study, which examines 39 retirement income systems and covers almost two-thirds of the world's population, outlined three other factors that will reduce retirements benefits: a fall in investment returns, lesser future government support, and an increase in earlier access to retirement benefits.
The potential effects from Covid-19 - from Mercer CFA Institute Global Pension Index 2020 - are:
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