Kazakhstan ranks 24th in the 2024 Mercer CFA Institute Global Pension Index, outperforming the US and Saudi Arabia. The pension system scored well in sustainability and integrity but needs improvement in adequacy. Recommendations include reducing early withdrawals and increasing workforce participation among older individuals.
Kazakhstan has achieved an impressive 24th place out of 48 countries in the Mercer CFA Institute Global Pension Index (MCGPI), as published on October 15. The MCGPI evaluates pension systems based on three crucial sub-indices: adequacy, sustainability, and integrity, which encompass over 50 specific indicators. Kazakhstan received scores 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 nations such as the United States, Saudi Arabia, and several others. Despite Kazakhstan’s strong performance, the adequacy sub-index indicates areas that require attention. Notably, the pension system’s vulnerability is highlighted by the necessity for enhancements. Recommendations from the Mercer CFA Institute suggest implementing measures to restrict early access to private pension funds and promote increased labor force participation among older age groups, particularly in light of increasing life expectancies. The necessity to bolster pension systems is underscored by broader demographic trends, such as declining birth rates and rising longevity. The World Economic Forum emphasizes that the demographic landscape has shifted significantly, 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.” This shift necessitates a reevaluation and adjustment of pension systems globally to ensure sustainability and adequacy for aging populations.
Kazakhstan’s ranking in the Global Pension Index is significant as it reflects the country’s commitment to improving its pension system within a rapidly changing demographic landscape. The MCGPI serves as a comprehensive assessment tool that analyzes pension systems across multiple countries, thereby providing insights into strengths and weaknesses within individual systems. Given the challenges of an aging population combined with lower birth rates, it is imperative for pension systems to adapt, ensuring financial security for future retirees.
In conclusion, Kazakhstan has distinguished itself by ranking 24th in the Global Pension Index, showcasing a solid performance in sustainability and integrity while indicating the need for improvements in adequacy. As the demographic landscape continues to evolve, it is critical for Kazakhstan to address the identified vulnerabilities in its pension system. The recommendations from the Mercer CFA Institute could serve as essential steps toward enhancing the country’s pension framework, ensuring that it meets the needs of its aging population.
Original Source: astanatimes.com
