No matter what stage you are in your career, it’s a good idea to think about your retirement plans because no one wants to—or can—work forever. Employers are required by the government to take a portion of their employees’ salary and put it towards their retirement plan. There are also options available for self-employed and non-working individuals.
However, a recent study found that the Philippines has one of the worst retirement systems in the world, according to Rappler. We have the fourth lowest overall index value among 37 economies, according to the 2019 Melbourne Mercer Global Pension Index. At 43.7, the Philippines ranked just above Turkey, Argentina, and Thailand.
The study considered a variety of factors. The Philippines ranked the lowest in terms of integrity, which included “regulation and governance, protection and communication for members, [and] operating cost,” according to Rappler.
In terms of adequacy, the Philippines was the third lowest on the list. This sub index included benefits for the poor and the efficiency features of the pension system.
On the other hand, the country made it to the top 15 in terms of “level of funding, length of expected retirement, labor force participation rate of the older population, and the current level of government debt and economic growth.”
The study’s recommendations? “The Philippines can consider increasing the minimum level of support for the poorest aged individuals and widening coverage of employees,” said Mercer Philippines wealth leader Harold Tan in a Business Mirror report. “It can also look into setting aside funds in the public system for the future and introducing options for retirement plan proceeds to be preserved for retirement purposes.”
Follow Dyan on Instagram.