Pension Indices as a Tool for The Analysis and Evaluation of Pension Systems

Abstract

The article outlines the methodology for determining the indices currently used in different countries to evaluate and contrast pension benefits, as well as for the global rankings of pension systems based on the indices. The purpose of the study is to determine the analytical potential of pension indices, their objectivity, and the possibilities of using them to analyze the Russian pension system. Pension provision problems are becoming increasingly acute in today’s society, and the imbalance of pension systems is on the rise. Among the main challenges for pension systems are the long-term trend of population aging, intense changes in the labor market, financial instability, and risks of long-term investment of retirement savings. In this context, it is imperative to conduct an objective analysis of the parameters of pension systems, compare them, and assess the reforms undertaken in various countries. One way to analyze and evaluate pension systems involves using composite indices. In the study, the author reviews the following pension indices: Allianz Pension Index (API), Melbourne Mercer Global Pension Index (GPI), and Natixis Global Retirement Index (GRI). The article presents comparative characteristics of pension system ratings in different countries and shows Russia’s place among them. Special attention is given to socio-­economic and demographic factors affecting the adequacy of pensions and the long-term sustainability of pension systems. The recommendations of index developers on reforming pension systems in different countries are analyzed. Conclusions on the possibilities and methodological limitations of different integrated indices for analyzing and ranking of pension systems are made. The study also suggests improvements for the analysis tools used in pension systems.