India ranks 43rd in this year’s GRI out of 43 countries and has the same score compared to last year. Its sub-indices all rank in bottom five
Natixis Global Asset Management and CoreData Research has released a Global Retirement Index (GRI) in August 2017 “to examine the factors that drive retirement security and to provide a comparison tool for best practices in retirement policy.”
According to the report, “Retirement security is challenged on many fronts across the globe. Slow growth, low interest rates, and the looming threat of inflation stretch the economics of retirement funding. Debates about the viability of entitlement programs and the prioritization of short-term goals for lower taxes and deficit reductions over ensuring long-term sustainability of retirement benefits make the politics of retirement contentious. And the perpetual shifting of funding responsibility to the individual is changing the mechanics of retirement.”
The index takes into account the particular characteristics of the older demographic retiree group in order to assess and compare the level of retirement security in different countries around the world.
The four thematic indices cover key aspects for welfare in retirement: the material means to live comfortably in retirement; access to quality financial services to help preserve savings value and maximize income; access to quality health services; and a clean and safe environment.
India ranks 43rd in this year’s GRI out of 43 countries and has the same score compared to last year. Its sub-indices all rank in bottom five. Compared to last year’s report, India declines in Material Wellbeing (41st) and Health (43rd) sub-indices but gains ground in Finances (39th) and Quality of Life (43rd).
Despite finishing third to last for the Material Wellbeing sub-index, India actually has a top five finish by having the third highest score for the employment indicator. However, it has the lowest income per capita of all countries in the GRI. Additionally, its score for the income equality indicator declines compared to last year’s report.
For second year in a row, India ranks last in the Health sub-index and its score declines even more from last year. It has the lowest scores for all indicators within the sub-index and declines in the insured health expenditure compared to last year.
India’s largest sub-index improvement is in Finances and it moves up three spots from its ranking last year. However, India still has the fifth-worst sub-index score of any country in the GRI.
Eight of the top-performing countries in this year’s GRI – Norway, Switzerland, Iceland, Sweden, Germany, Denmark, the Netherlands and Luxembourg – are located in Western Europe. Each of the countries in the top 10 overall ranks highly in at least one sub-index, and most have strong scores across multiple sub-indices. Seven of the countries placed in top 10 for Material Wellbeing, seven place in top 10 for Quality of Life, and six place in top 10 for Health.
As the report adds, “Evaluating the progression of different countries and assessing their potential risk factors are key elements of the GRI. A static representation of a country’s current conditions, without considering the past or future, would misrepresent the true level of security for retirees. The GRI takes into account economic development, policy and political modifications, demographic changes, and environmental conservation when assessing retiree welfare.”
With respect to the challenge faced by BRICS nations as far as governance is concerned, the report adds, “Poor governance is a key driving force behind the below-average performance of the BRIC (Brazil, Russia, India, and China) countries’ finances. But they also rank high where Western Europe stumbles, offering better old age dependency ratios and lower tax pressures, while employment and government indebtedness score more positively. The challenge is that governance accounts for a large portion of the Finances sub-index and Western Europe continues to outpace the BRICs in this sector. These countries have a poor showing in the other sub-indices, indicating that crucial elements related to the life of retirees, such as health expenditure per capita, remain inadequate.”