Saudi Arabia has achieved positive results in the 2020 Mercer CFA Institute Global Pension Index survey (MCGPI), which benchmarks world retirement income systems.
According to the survey, Saudi Arabia had an overall index value of 57.5 among the countries analyzed, scoring slightly higher than that in 2019.
This push is mainly attributed to the recent amendment in the retirement age for women from 55 to 60 years old, which is now equivalent to men.
The measure implemented by the General Organization for Social Insurance (GOSI) has increased the sustainability score of the overall pension system in the Kingdom, it explained.
Saudi Arabia has maintained consistent results for a third consecutive year, said Tarek Zouiten, Mercer's retirement business leader for the Middle East.
“Saudi Arabia’s system has a variety of good features and there are strong indications that the government is taking practical measures to ensure a sustainable system for the future generations.”
“Elderly population is expected to rise considerably in the next decade with the fast demographic shifts in the Kingdom combined with a decline in birth rates,” he added, stressing that it is extremely important to recognize the imperative of implementing the necessary policy changes to respond to the challenges raised by this ageing population.
The index highlights key strengths of retirement pension systems around three sub-indexes - adequacy, integrity and sustainability, on which Saudi Arabia scored 59.6, 51.6 and 62.4, respectively.
The Kingdom demonstrated positive results in adequacy due to its generous retirement benefits with high minimum pensions relative to earnings and a tax-free income.
“In the wake of the financial pressures brought on by the pandemic, supporting financial security in retirement and providing guidance to modernize the pension landscape becomes an even greater challenge,” said William Tohme, CFA, senior regional head – MENA at CFA Institute.
The Netherlands had the highest index value (82.6) and has consistently held first or second position for 10 out of the past 12 MCGPI reports.
