India’s Pension System Receives ‘D’ Grade in Global Ranking
New Delhi – India’s retirement income system has been assigned a ‘D’ grade in the Mercer CFA Institute Global Pension Index 2025, signaling significant shortcomings in providing adequate retirement security for its citizens.
The annual index, released today, assessed 52 retirement systems globally, covering nearly 65% of the world’s population, and ranked India at 43.8 points. This places the nation well below the global average of 64.5. Top-performing systems included The Netherlands (85.4), Iceland (84.0), and Denmark (82.3), all receiving an ‘A’ grade. India’s system, a combination of the Employee Provident Fund Organisation (EPFO), the Employees’ Pension Scheme, and limited social programs, continues to struggle with structural issues.
The report identified Adequacy as India’s weakest pillar, awarding it an ‘E’ grade (34.7) due to low income replacement levels for retirees and insufficient social assistance for the elderly. Sustainability also received a ‘D’ grade (43.8), raising concerns about the system’s long-term viability given demographic changes and low participation among informal workers. While Integrity scored slightly higher with a ‘C’ grade (58.4), the report emphasized the need for improved regulatory oversight and transparency, particularly within private and occupational pension schemes – a critical factor as poverty reduction efforts are closely linked to adequate retirement planning. You can find more information about pension systems here.
Officials have indicated that reforms are under consideration to address the identified weaknesses and improve the overall sustainability and effectiveness of India’s pension system, though a specific timeline has not been announced.
