MUNICH — Asia-Pacific pension assets should grow more than 250%, to €2.9 trillion, by 2015, according to a new report from Allianz Global Investors, Munich.
Australia is projected to have the largest increase, to €1.484 trillion in 2015 from €410.1 billion ($559.5 billion) in 2004, an increase of 262%, according to the report, "Asia-Pacific Pensions: Reform Trends and Growth Opportunities."
The boom in Australian assets is attributed to two sources: performance of the already existing capital and new inflows, according to Miksa Brigitte, head of European pensions business development at Allianz. "There is a healthy economic growth and existing comprehensive pension provision," she said.
Pension assets for Asia (including Japan) are expected to rise to €2.9 trillion in 2015 from €1.1 trillion in 2004, but Japan is expected to only experience a net increase of €105.3 billion, to €697 billion in 2015 from €591.7 billion in 2004, due in part to a worse demographic situation and the fact the national pension system is entirely a pay-as-you-go fund.
Government pension funds in the nine countries and territories covered by the report had a combined €709 billion in assets under management as of Dec. 31. By far, the largest was the Japanese Government Pension Investment Fund, Tokyo, with €547 billion in assets, followed by the €90 billion South Korean National Pension Scheme, Seoul.
Many governments have started to "professionalize" the asset management of their funds to enhance and stabilize returns, according to the report.
"In Asia, you very often have a first-pillar pension provision. We see a trend to outsource these portfolios," said Ms. Brigitte.
The report follows the common definition of a three-pillar system by the Organization for Economic Co-operation and Development, with the first pillar as a government-sponsored pension scheme with defined benefits.