Page 17 - Turkinsurance Digital Magazine

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to support their citizens and retirement
income systems. For example, Austral-
ia enabled individuals whose income had
dropped by more than 20% to access up
to 13,000 USD from their pension assets,
while Chile allowed active contributors
to voluntarily withdraw 10% of their in- Overall index ranking
dividual pension funds, with a maximum out of 39 systems
of 5,600 USD. Interestingly, the top two
retirement income systems in the Global
Pension Systems, namely the Netherland
and Denmark, have not permitted early
payments, even though the assets of each
pension system are more than 150% of Adequacy
sub-index
the country’s GDP.
Sustainability
The sustainability sub-index measuring sub-index
various indicators which will influence
the likelihood that the current system will Integrity
be able to provide benefits in the future, sub-index
continues to emphasize the weaknesses in
many systems. Due to the negative eco-
nomic growth in many countries because Even prior to the pandemic, many public
the health implications; there are long- of Covid-19, sustainability sub-index and private pension systems around the
term economic effects impacting many in- points of many countries declined by an world have been under increasing pressure
dustries, interest rates, investment returns average of 1.2 points. to maintain benefits. It is of critical im-
and community confidence in the future. portance for governments to reassess the
As a result, those impacts are expected Serap Özalp Arslanargın, Leader of Indi- strengths and weaknesses of their pension
to clearly reflect on the provision of ade- vidual Pension Consultancy and Brokering systems, in order to get better long-term
quate and sustainable retirement incomes at Mercer Turkey, stated that econom- results for pensioners. Turkey has been in-
over the longer term. Government debt has ic stagnation caused by the coronavirus cluded in this report for the second time
increased considerably in many countries health crises around the world would re- this year. Our country’s pension system
following the coronavirus outbreak. This sult in reducing the pension contributions has also been significantly impacted by the
government debt is likely to restrict the and investment returns in many countries, coronavirus outbreak. However, the over-
ability of future governments to support and increasing government debt. This will all structure of our system, efficient en-
their older populations, either through inevitably impact retirement incomes in forcement of the law and legislations and
pensions or through the provision of oth- the future, which means that some peo- transparency of the system constitute our
er services such as health or aged care. In ple will have to work for longer years, strengths. The index also shows us that we
light of Covid-19, there have been a range while others will have to settle for a lower have room for improvements, especially in
of decisions made by some governments standard of living in retirement,” she said. terms of sustainability.”

Unemployment
Insurance Costs Contributions
Employer difficulties Work
longer?

Investment Income
Economic recession Investment returns Take more
Member switching risk?
Reduced
retirement
benefits
Government debt Future Government Save
Migration support more?

Settle for
Early access to poverty?
benefits