Thanks to input from a reader (anon@October 13, 2011 4:03 PM), we know how Singapore is ranked according to the Global Pension Index 2011. The Melbourne Mercer Global Pension Index compares retirement income systems around the world and rates them based on their adequacy, sustainability and integrity.
The following table shows how Singapore fared when compared to 15 other countries:
The Singaporean index value fell from 59.6 in 2010 to 56.7 in 2011 due to a reduction in each of the three sub-indexes, including "Adequacy", which carries a weighting of 40 percent . The Adequacy sub-index represents the benefits that are currently being provided, such as "Benefits", "Savings", "Tax Support", "Benefit Design", and "Growth Assets", all of which must sound Greek to the average Singaporean. The people who are enjoying these benefits seem to be in the top income tax bracket.
The report attributed the fall in index value to 56.7 in 2011 to several reasons: a lower net household saving rate, reduced pension coverage and the effect of some new investment rules. Let's hope the last bit does not refer the games that GIC and Temasek plays with our CPF.
Grade C (index value 50–65) is given to a system that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability are questionable.
Interestingly, mention is made of common challenges in flaky retirement income systems which include "Reducing the leakage from the retirement savings system prior to an individual’s retirement". Oh yes, we recognise the leak to the HDB coffers, but how to plug it?
Here's how the country stands in the overall scores:
1 Netherlands - 77.9
2 Australia - 75.0
3 Switzerland - 72.7
4 Sweden - 72.6
5 Canada - 69.1
6 United Kingdom - 66.0
7 Chile - 64.9
8 Poland - 58.6
9 Brazil - 58.4
10 United States - 58.1
11 Singapore - 56.7
12 France - 54.4
13 Germany - 54.2
14 Japan - 43.9
15 India - 43.4
16 China - 42.5
It looks like the Swiss standard of living is still a long way to go.