ASIA - The pensions industry in Asia may be spared of the "pensions time-bomb" facing other developed markets due to positive demographics and a propensity to save. According to Justin Pascoe, Asia ex-Japan CIO at State Street Global Advisors (SSgA), the region has seen a number of important developments over recent years which sets it in good stead for the future.
He said Singapore has its central provident fund, Hong Kong started a similar vehicle - the mandatory provident fund - in about 2001, pension reform is gaining momentum in places like Taiwan and Korea, and China has various strategies in place to beat population ageing.
“If I stepped back and looked what the two key ingredients for a pensions market were, then I would say demographics with an ageing population where both the people and the government recognised the need to save for retirement, and already had the propensity to save,” he said. “You can tick both these boxes for the [Asian] region, where there is a fairly rosy future for the pension industry.”
Andy Gillan, Asian equities investment manager at Aberdeen, added that “positive trends like demographics, and a high percentage of young people in many of the region’s countries will clearly have a knock-on effect on impact levels and demand.”
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