CFA Institute’s decision to support Mercer’s global pension index is timely given that generating retirement income requires rethinking investment policy and regulation, according to renowned pension expert Keith Ambachtsheer.

Formerly known as the Melbourne Mercer Global Pension Index, the index is now sponsored mainly by CFA Institute instead of the Australian state of Victoria, with Monash University continuing to provide academic support.

In his most recent newsletter, Ambachtsheer said the CFA Institute had “astutely recognised that the [index] project fits well into its vision of building global wealth and well-being”.

He commented further on the association’s involvement in the context of the “almost universal ‘raise retirement savings rates’ recommendation generated by the index”.

The recommendation deserved further reflection, he said.

“Raising retirement savings rates now will not automatically generate more retirement income in the future,” said Ambachtsheer.

“That outcome also requires those additional retirement savings are productively invested to meet the growing demand for the goods and services future retirees will want as consumers.

“As noted in past [newsletters], that desired outcome requires increasingly active participation by pension organisations in ensuring that retirement savings are indeed converted into sustainable high-productivity capital.

“That in turn means rethinking investment policy and regulation.”

Through its support, the CFA Institute would help foster greater understanding of the critical role its members – investment professionals – play in “moving the global savings-to-investment conversion process in the right direction”, he added.

The Netherlands retained the top ranking in this year’s global pension index report, followed by Denmark and Israel. 

The rest of Ambachtsheer’s take on the index can be found in the November ‘Ambachtsheer Letter’, here.

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