Every year, Mercer and the CFA Institute publish the Global Pension Index, which evaluates pension systems around the world based on three core pillars:

• Adequacy: Do retirees receive enough?
• Sustainability: Can the system last without collapsing?
• Integrity: Is it transparent, well governed, and fair?

The report ranks countries, assigns letter grades, and highlights reform paths. It reveals which nations are doing well, and which aren’t.

In the 2024 version (published October 2025), India scored just 44.0 (rated D), placing it at the bottom of 48 systems evaluated. Singapore, by contrast, scored 78.7, breaking into the top tier of pension systems globally.

Singapore’s Climb: From C to A

Singapore’s pension journey is instructive. A few key features:

• Its system is anchored in the Central Provident Fund (CPF), with mandatory contributions by both employer and employee.
• Some CPF balances are withdrawable early (for housing, medical), but a core “retirement account” is preserved and paid out as lifetime income via CPF Life.
• The system emphasizes transparency: citizens can clearly see how much they’ll get in retirement.
• Over time, Singapore improved on sustainability and integrity measures, helping lift its ranking from a C-grade to A-grade system.

In short: Singapore balances flexibility and protection, while enforcing rules that preserve pension savings for old age.

Why does India’s pension system score so low?

India’s pension landscape is fragmented, and the Global Index underscores multiple gaps:

• India’s retirement income system consists of the Employee Provident Fund (EPFO), some employer-managed pension schemes, and social security schemes for informal workers.
• But coverage is very limited: only a fraction of the workforce is in formal pension or provident fund schemes.
• The Index report highlights key areas for improvement:
  1. Introduce a minimum safety-net pension for the poorest aged individuals
  2. Expand pension coverage to informal and gig workers
  3. Set a minimum access age so benefits aren’t drained too early
  4. Strengthen regulation and governance in private pension systems
  5. Reduce system leakage (premature withdrawals, gaps)
  6. Improve transparency and integrity
  7. Reduce gender pension gap and gaps for minority groups.

Currently, India is classified as Grade D, meaning it has some desirable features but also major weaknesses that put its effectiveness in doubt.

How India could reform its pension system

To move up the ranks, India (and Indian states) should consider:

1. Find ways to implement, at a national level, automatic or compulsory enrollment especially for informal and gig sectors
2. Tighter rules against early withdrawals make pension funds harder to dip into before retirement
3. Improved governance & oversight disclosures, audits, fiduciary duties
4. Expand retirement ages or phased retirement to reflect increasing life expectancy
5. Policy incentives over mandates encourage investments in national goals without forcing behavior
6. Transparency & education many Indians don’t understand how pension assets work

The Index also emphasizes that even high‑ranking systems continuously refine themselves, there is no “perfect” system.

Singapore vs. India

Feature	Singapore	India
Coverage	Mandatory, universal for workers	Partial, mostly formal sector
Transparency	Clear statements, integrity measures	Low awareness, opaque rules
Flexibility + Protection	Some withdrawals allowed, but retirement core preserved	Looser access rules, leakage risk
Governance	Strong regulation, integrity	Fragmented oversight, regulatory gaps

The contrast shows that good systems are not just about money, they are about structure, rules, incentives, and public trust.

When you can’t rely only on the system

Given the systemic challenges, YOU must take responsibility for their retirement security. :

• Use pension / retirement plans (such as NPS, PPF, pension-oriented ULIPs) as long-term commitments
• Choose annuity / lifetime income options rather than lump-sum withdrawals
• Diversify your retirement assets: equity, real estate, mutual funds
• Avoid early withdrawals unless absolutely necessary
• Seek professional advice to tailor a pension plan suited to your goals

In essence: don’t depend solely on government schemes. Build your own multi‑pillar retirement plan.

India must transform its pension system from fragmented, under‑covered, and unstable to one that is inclusive, sustainable, and trusted. Singapore’s success shows it’s possible to combine flexibility with security.

insurancepe believes that until systemic reform catches up, Indians must build their own retirement foundation, and a well-chosen pension plan offers one of the strongest paths to financial dignity in retirement.

Don’t wait. Start planning today with insurancepe!

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