NEW DELHI: India’s pension system was given a poor ‘D’ in the Mercer CFA Institute Global Pension Index 2025, which assessed 52 retirement income systems covering nearly 65% of the world’s population.
The Index—built around three key pillars of Adequacy (40%), Sustainability (35%), and Integrity (25%)—ranked India at 43.8 points, placing it in the ‘D’ category, far below the global average score of 64.5.
This year’s top performers included The Netherlands (85.4), Iceland (84.0), Denmark (82.3), Singapore (80.8), and Israel (80.3)—all earning an ‘A’ grade for robust and sustainable pension systems.
In contrast, India’s fragmented pension architecture—combining the Employee Provident Fund Organisation (EPFO), the Employees’ Pension Scheme, and limited social protection programmes for informal workers—continues to face structural gaps that undermine retirement security for most citizens.
According to the report, Adequacy remains India’s weakest link, earning an ‘E’ grade (34.7). This reflects extremely low income replacement levels for retirees and limited social assistance for the elderly poor.
On Sustainability, India scored 43.8 (‘D’ grade), indicating concerns about the system’s long-term resilience amid demographic shifts, low participation from informal workers, and limited savings.
The Integrity pillar fared slightly better with a ‘C’ grade (58.4), though the report highlighted the need for stronger regulatory oversight and transparency to enhance trust in private and occupational pension schemes.