India needs to undertake strategic reforms to revamp the pension system so as to ensure adequate retirement income, revealed the 2021 Mercer CFA Global Pension Index survey (MCGPI) released on Tuesday. The Indian pension system ranked 40th on the overall index ranking out of 43 systems and had the lowest rank in the adequacy sub-index.

The primary objective of this annual survey by Mercer Consulting, a leading global management consulting firm, is to benchmark each retirement income system using more than 50 indicators.

This year’s index edition added four new retirement systems—Iceland, Taiwan, UAE and Uruguay. In its first appearance in the Index, Iceland overthrew the Netherlands to receive the highest overall index value of 84.2. Thailand had the lowest overall index value at 40.6.

According to the survey, India had an overall index value of 43.3 among the countries analyzed. The index highlights key strengths of retirement pension systems around three sub-indices—adequacy, sustainability and integrity, where India scored 33.5, 41.8 and 61.0 respectively. The adequacy sub-index represents the adequacy of the benefits that are being provided, the sustainability sub-index represents the likelihood that the current system is able to provide benefits in the future, while the integrity sub-index includes many legislative requirements that influence the overall governance and operations of the system which affect the level of confidence that citizens have in their system.

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