The Gold Standard – an A-Grade System

This index has now been prepared for three years and no country has yet attained an A-grade result — that is, an overall index value above 80.   Some commentators have therefore raised the following questions:

• What would an excellent retirement income system look like?
• Have you made it too hard?
• Is it possible or unrealistic to receive an A-grade?

This chapter considers these and related questions and shows that it is possible, with appropriate public policy, to develop a framework and system that delivers an A-grade pension system within a developed economy. Of course, it is recognised that no country can suddenly develop such a system but it is valuable to consider the features that are present in a national retirement income system that would have an index value above 80.

Adequacy

The primary objective of any retirement income system is to deliver adequate retirement incomes. The first two indicators of the adequacy sub-index focus on the minimum income level and the median income earner respectively. Higher income earners have a greater capacity to save through their working years and it is therefore more important for the index to focus at the lower end of the income spectrum.

To read more, please refer to page 17 of the 2011 Melbourne Mercer Global Pension Index.