South Africa’s retirement income system has been ranked the 31st best among the 43 systems worldwide covered this year by the Mercer CFA Institute Global Pension Index. This represents a fall of four places from 27th position in 2020 out of 39 systems ranked that year.
The decline was despite South Africa’s overall index value increasing to 53.6 this year from 53.2 in 2020, as is indicated by the 2021 Mercer CFA Institute Global Pension Index report.
This was because four retirement systems were added to the rankings this year, of which three of them surpassed that of South Africa’s. The three are Iceland (ranked 1st), Uruguay (20th) and UAE (22nd). At the same time, China jumped up in the rankings from 33rd place in 2020 to 28th in 2021.
The Global Pension Index uses the weighted average of the sub-indices of adequacy, sustainability and integrity to measure each retirement system against more than 50 indicators.
It benchmarks retirement income systems around the world highlighting some shortcomings in each system and suggests possible areas of reform that would provide more adequate and sustainable retirement benefits.
The table below summarises the rankings of South Africa’s retirement income system:
The Global Pension Index report notes that South Africa’s retirement income system comprises a means-tested public pension and tax-supported voluntary occupational schemes.