JAPAN/CHINA - Asian pension funds started to look to the future with China tightening fund management regulations and Japan announcing major new investment.
Japan’s Government Pension Investment Fund (GPIF) announced its intention to invest new money worth JPY11.8trn (US$100m) at the start of the new financial year, beginning next week.
As the world’s largest pension fund, GPIF holds around 50% of its JPY81.9trn in domestic bonds, but this is expected to rise to up to 65.5% over the next year.
Despite gaining more independence last year, the fund has stuck to an allocation model drawn up by the government in 2001.
The Japanese government recently finalised a bill scapping the Social Insurance Agency which was at the centre of the country’s pension scandal in 2004.
It also considered other proposals which would see pension scheme members able to pay premiums by credit card in an effort to increase funds.
In Chinese pensions news, vice minister for labor and social security Lui Yongfu said at a corporate annuity forum that the Chinese government was working on formal regulation to standardise pension fund management.
Some 37 financial institutions were able to act as pension fund custodians in 2005 - Lui said that due to rapid growth in Chinese pension funds this would likely be expanded.
Lui added: “To make the management of pension funds transparent, there must be a solid system to monitor the scale, participants and operation of the fund.”
This regulation would standardise policies on taxation across the state-owned system.
This recent declaration followed attempts to rebuild confidence in China’s pension system after the major pension embezzlement scandal last year,
Earlier this month, the government announced plans for a new firm to manage around US$1.3bn in pension and social security funds to be set up in Shanghai.
Vice president of Shanghai Pudong Development Bank Ma Li was appointed by the city government as chief coordinator of the new Yangtze Pension Insurance Co Ltd.
The Pensions Regulator (TPR) has granted 11 master trusts extensions to apply for authorisation, as it confirms it has received 22 applications ahead of the 31 March deadline.
Aegon Master Trust, Fidelity Master Trust and Ensign have sent off their authorisation applications to The Pensions Regulator (TPR).
Self-administered pension funds spent £15bn on payments to pensioners in Q4 2018, but received just £12bn in contributions (net of refunds), Office for National Statistics (ONS) data reveals.
Aberdeen Standard Investments (ASI) and Gresham House are to team up to form a joint venture.