Indian pension system ranked lowest across the globe

India’s pension system has been ranked as one of the lowest, falling under Category D in the Mercer CFA Institute Global Pension Index 2025.

According to the report published by Mercer, India’s pension system falls into the D category, which represents “a system that has some desirable features but also has major weaknesses and/or omissions that need to be addressed; without these improvements, its efficacy and sustainability are in doubt.”

Along with India, Turkey, Argentina, and the Philippines also fall under the D grade.

In contrast, the Netherlands, Iceland, and Denmark secured the top positions, earning A grades, which means “a robust retirement income system that delivers good benefits, is sustainable, and has a high level of integrity.”

The index grades and scores range from D grade (India, 43.8) to A grade (the Netherlands, 85.4), highlighting the wide variation in how nations structure and sustain their retirement systems.

India’s pension system

India’s retirement income system includes an earnings-related employee pension scheme, a defined contribution (DC) employee provident fund (EPFO), and supplementary employer-managed DC pension schemes. The government has also introduced several universal social security programs aimed at benefiting the unorganised sector.

The report suggests that India’s overall index value could be improved by…

Introducing a minimum level of income support for the poorest elderly citizens.

Expanding pension coverage to include the unorganised workforce, thereby increasing total pension assets over time.

Establishing a minimum access age to ensure that benefits are preserved for retirement purposes.

Strengthening regulatory oversight of private pension schemes.

India’s index value declined slightly from 44.0 in 2024 to 43.8 in 2025, primarily due to a new question added in the Sustainability sub-index.