ASIA-PACIFIC - Pensions markets in the Asia-Pacific region are set too grow by from e1.1trn to e2.9trn by 2015, according to new research from Allianz Global Investors.
Australia, which has one of the two mandatory systems in the region alongside Hong Kong, is expected to account for 60% of the total growth. However, the most exciting growth opportunities are in the most populated countries of China and India.
Asia faces even more dramatic demographic changes than Western Europe,” said Johann Goldbrunner, member of the board of Allianz Global Investors. “The old-age dependency ratio is expected to treble in Asia from 10% today to 27% by 2050 with some countries facing demographic ratios of nearly 70%. In the EU-15 this ratio is expected to nearly double to close to 50%.”
Currently, Australia and Japan dominate the pension markets in the region accounting for some 90% of pension assets under management. The importance of the Australian pensions market will increase even further with a compound annual growth rate of 12% expected by 2015.
Japan, the largest pensions market in the region with e593bn in assets under management, cannot be expected to grow by any significant amount over the next 10 years as it will be the first country to face a declining population from 2007.
The challenge ahead for markets like China and India will be to increase the percentage of the population with pension coverage. Currently, Thailand has a coverage rate of just over 32%, China 20% and India 10%.
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