Singapore's Central Provident Fund (CPF) system is tops in Asia again owing to continued improvements, but more can be done to improve its standing, like raising the age at which people can access their savings, according to Mercer's Global Pension Index.
Singapore scored a B grade, climbing to 70.4 this year from 69.4 last year - which itself was an improvement from the 67 in 2016 - due to improvements in the sustainability sub-index. In the sub-indices, the Republic scored C+ for adequacy, B for sustainability, and A for integrity.
Singapore's overall B grade - shared with nations including Finland, Australia and Norway - is defined as "a system that has a sound structure, with many good features, but has some areas for improvement that differentiate it from an A-grade system".
"Having one of the most developed pension schemes in Asia, Singapore has continued to make improvements through the CPF by providing more flexibility to its members," said Mr Garry Hawker, Mercer's director of strategic research for growth markets.
STRIVING TO BE BETTER
Having one of the most developed pension schemes in Asia, Singapore has continued to make improvements through the CPF by providing more flexibility to its members.
MR GARRY HAWKER, Mercer's director of strategic research for growth markets.
He added that the overall index value for Singapore's CPF could be further improved by "reducing the barriers to establishing tax-approved group corporate retirement plans; opening CPF to non-permanent residents; and increasing the age at which CPF members can access their savings that are set aside for retirement".
A common trait across results from all 34 countries surveyed was the growing tension between adequacy and sustainability. Dr David Knox, the study's author and senior partner at Mercer Australia, said the natural starting place to having a world-class pension system is ensuring the "right balance between adequacy and sustainability".
"It's a challenge that policymakers are grappling with," he said. "For example, a system providing very generous benefits in the short term is unlikely to be sustainable, whereas a system that is sustainable over many years could be providing very modest benefits. The question is: What's an appropriate trade-off?"