SINGAPORE'S Central Provident Fund (CPF) scheme has been named one of the top 10 pension systems in the world, among the likes of countries such as Denmark and Sweden.

The annual Melbourne Mercer Global Pension Index ranked Singapore seven out of 20 countries, an improvement from last year's 13 out 18 countries showing.

Singapore scored 66.5 overall, up from 54.8 last year. Denmark took first place with 80.2 and Indonesia with 42 stood in last place.

On a letter grade level, Singapore scored a "B" which is for pension systems with a "a sound structure, with many good features, but has some areas for improvement".

Last year, the CPF scheme got a "C", which made it a system "that has some good features, but also has major risks or shortcomings that should be addressed".

The survey is based on benchmarks set by the Organisation for Economic Co-operation and Development (OECD) to rate pension systems.

Mr Mark Juneau, Mercer's Asean retirement business leader, explained that Singapore's improved performance is due to a change in the way the OECD measures retirement income.

The OECD now looks at all accounts within the CPF to calculate retirement income, instead of focusing on the retirement account which was the practice in previous years.