With the ageing-population crisis set to unfold across Asia over the coming years the need for HR to have an efficient pension system in place has never been greater. According to the Melbourne Mercer Global Pension Index 2013, five out of six Asian countries maintained a ‘D’ grade—meaning their system is in need of improvement. The research identifies possible steps HR could take to provide more adequate retirement benefits, increased sustainability and greater trust in the pension system. Organisations are advised to:
- promote higher labour force participation at older ages;
- encourage or require higher levels of private saving, both within and beyond the pension system, to reduce the future dependence on the public pension;
- reduce the leakage from the retirement savings system prior to retirement thereby ensuring that the funds saved, often with associated taxation support, are used for the provision of retirement income; and
- increase the governance of private pension plans to improve the confidence of plan members.
Dr David Knox, Senior Partner, Mercer said, “Pension systems in many Asian countries are in an embryonic phase and we expect them to gradually strengthen in the coming years. However, many Asian countries are also facing an ageing population at a rate beyond some Western countries, which makes it particularly challenging, and urgent, to develop a sustainable pension system.”
Paul Arkwright
Publisher
