The Financial Burden of Retirement Is a Global Problem—but Asia Is Uniquely Vulnerable
Asian pension systems are facing major challenges. The region is experiencing seismic demographic changes, with rapidly aging populations and declining birthrates. But investment returns are relatively low due to geopolitical uncertainty and minimal interest rates.
With the region having relatively few robust retirement systems, many Asian countries will struggle to provide adequate pensions. Governments need to take positive action now to reduce financial pressures and avoid intergenerational conflicts between the young and old.
Life expectancy at birth in the region has increased by seven to 14 years in most countries during the last 40 years, according to the 2018 Melbourne Mercer Global Pension Index (MMGPI), which ranks pension systems around the world on adequacy, sustainability and integrity. This is an average of one additional year every four years. The increased life expectancy of a 65 year-old over the last 40 years has ranged from 1.7 years in Indonesia to 8.1 years in Singapore.
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