EPFO May Lower Interest Rate on Provident Fund Deposits For 2017-18
New Delhi, October 23: India’s pension system has shown a steady improvement in recent years. Out of the 30 countries, India has ranked 28 under review in the Melbourne Mercer Global Pension Index 2017, which was topped by Denmark for the sixth straight year. According to the study, India’s pension system is found to be more sustainable than that of Poland, Germany, France, Japan, Italy, Austria, Brazil, China and Argentina. The report further states that the overall index value of India has increased from 43.4 in 2016 to 44.9 in 2017. This means India’s position in sub-index value under sustainability increased from 40.9 to 43.8 in 2017.
Preeti Chandrashekhar, India Business Leader Retirement, Health and Benefits, Mercer was quoted by PTI saying that the rise in value under the integrity sub-index from 53.4 to 55.1 is a reflection of Government of India’s continued efforts to improve the transparency and member experience in various schemes. “The extension of pension benefits to the unorganised sector and schemes like Pradhan Mantri Vaya Vandana Yojana (PMVVY), a simple scheme with assured pension of 8% which will provide some amount of protection to elderly persons aged 60 years and above against interest rate risk as a result of uncertain market conditions, are some steps in the right direction…”, she added.
The government of India and PFRDA (the pension regulator) have also provided much-required impetus and thrust in encouraging participation in the National Pension System both in the organised and unorganised sector by its sustained campaigns and tax incentives. Jacques Goulet, President of Health and Wealth at Mercer was quoted by PTI saying that Japan, Austria, Italy, and France are examples of developed economies whose pension systems don t represent a sustainable model that will support current and future generations in their old age. “The Index is an important reference for policymakers around the world to learn from the most adequate and sustainable systems,” author of the report and Senior Partner at Mercer, Dr David Knox said.
The National Pension System in India is slowly gaining popularity. All the measures that have been initiated by the government of India has helped the nation to increase its index value in coming years. This year’s Melbourne Mercer Global Pension Index measuring 30 countries and covering 60 per cent of the world’s population urged countries with unsustainable pension systems to take action now, rather than risk the need to take even more drastic action in the future.