Kazakhstan ranks 24th in the Mercer CFA Institute Global Pension Index 2024, outperforming countries like the US and Saudi Arabia. It scored 45.8 in adequacy, 73.1 in sustainability, and 80.4 in integrity, culminating in a C+ rating. Recommendations for improvement focus on limiting pre-retirement pension fund access and boosting workforce participation among older citizens, amidst global demographic changes.
Kazakhstan has achieved noteworthy recognition, securing the 24th position among 48 nations in the annual Mercer CFA Institute Global Pension Index (MCGPI), as reported on October 15. The assessment conducted by the Unified Accumulative Pension Fund (UAPF) evaluated various pension systems across three key sub-indices: adequacy, sustainability, and integrity, considering over 50 distinct indicators. Kazakhstan’s performance included a score of 45.8 for adequacy, 73.1 for sustainability, and 80.4 for integrity, culminating in an overall score of 64.0 and a C+ rating, thus surpassing the United States, Spain, Japan, South Korea, China, and Saudi Arabia. The analysis indicated that while Kazakhstan exhibited commendable ratings in sustainability and integrity, its adequacy sub-index reflected a need for improvement, identified as the most vulnerable aspect of the pension system. To enhance adequacy, the Mercer CFA Institute has proposed measures such as imposing restrictions on pre-retirement access to private pension funds and encouraging higher labor force participation rates among older individuals in response to extended life expectancies. In light of evolving demographic trends—including declining birth rates juxtaposed with increasing life expectancy—the MCGPI emphasizes the necessity for advancements in pension frameworks globally. Notably, the World Economic Forum highlighted a significant demographic shift, stating, “there are now more people over the age of 65 than there are under the age of five— a dispersion that’s never occurred before.” Such changes underline the urgency of adapting pension systems to future needs.
The Mercer CFA Institute Global Pension Index (MCGPI) is an established benchmark that evaluates pension systems worldwide based on criteria such as adequacy, sustainability, and integrity. These assessments allow countries to identify weaknesses and strengths within their pension frameworks, tailoring reforms accordingly. As life expectancies rise and birth rates decline globally, nations like Kazakhstan are increasingly urged to refine their retirement systems to ensure long-term sustainability and to protect the financial well-being of aging populations.
In conclusion, Kazakhstan’s commendable ranking of 24th in the Global Pension Index reflects its efforts in maintaining a robust pension system, particularly with high scores in sustainability and integrity. However, the necessity to improve adequacy remains evident, prompting recommendations from the Mercer CFA Institute to strengthen the system through policy adjustments. As demographic shifts continue to challenge pension frameworks globally, Kazakhstan must address these vulnerabilities to secure a sustainable future for its retirees.
Original Source: astanatimes.com
