The Philippines' Retirement System Ranked Among the Lowest in the World
The data is in and the Philippines has one of the worst retirement systems among 39 countries. Yes, "one of," the good news is that we placed fourth lowest. Though we didn't land in the last spot in the ranking, there's still plenty to be concerned about.
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According to the Mercer CFA Institute Global Pension Index 2020, the Philippines ranks 36th place with an index value of 43. That's a drop from last year's score of 43.7 and previous rank at 34. Don't worry, we're not getting worse. The index added two new countries this year which probably bumped us off.
The index looks at a country's pension in many different ways, including sustainability, adequacy, integrity, and more. What really dragged the Philippines' down was integrity which looks at regulation, governance, communication, and operating costs.
"The overall index value for the Philippines system could be increased by raising the minimum level of support for the poorest elderly individuals along with broadening coverage of employees in occupational pension schemes," says Mercer’s wealth business leader for the Philippines, Harold Tan.
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He continues, "These measures would work to grow the level of contributions and assets and permit the Philippines to set aside funds in the public system for the future, reducing reliance on the pay-as-you-go system. In order to preserve long term retirement savings, ‘no cash-out’ options must be introduced and put into place."
