Shoring up retirement - PENSIONS - Magazine | Asia Asset Management
Published: October 4, 2021
Target date funds have become an important component in major Asian pension systems, and are designed as a default option in public and private retire...
Source: asiaasset.com
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Target Date Funds Have Become An Important Component In Major Asian Pension SystemsNd Are Designed Asa Default Option In Public And Private Retirement Plans Countries Like China Use Target Date Funds As Core Choices Their Commercial Pension Market According To Della LinA Senior Analyst At Investment Consultancy Cerulli AssociatesEtail Retirement FundsNcluding Target DateArget Risk And Multi Asset FundsN Asia Ex Japan Jumped 60 2 Year On To Us 16 5 Billion In December 2020 More Asset Managers Across The Region Are Introducing Retirement Funds Capitalise Growth Of Pension Markets And Wake Market Volatility Triggered By Coronavirus CrisisEtail Investors Have Been Focusing More On Pension Funds With Stable Cash Flow And Better Risk ProtectionIke Target Date And Risk FundsAther Than Risky Assets Lin Says They Tend To Allocate More The Funds For Retirement Protection Because Of Dynamic Asset Allocation Characteristics Last YearHina Overtook South Korea As The Largest Retail Retirement Market In Asia Ex JapanCcounting For 48 Of The Region Amp Rsquos Total Retail Retirement Fund Assets Under Management Nbsp Lin Says This Was Primarily Due To Launch Ofa Third Pension Pillar Scheme In China 2018 Tax Deferred Commercial Insurance Pilot Introduced Four Cities And Provinces As Part Plan Developa It Adds First State FundedNd The Second Pillar Enterprise And Occupational Annuities For Defined Contribution Schemes At Government Bodies State Owned Private Companies Amp Nbsp Lin Says Most Of Third Pension Products Are Either Target Date Or Risk FundsNd That There Are More Than 100 Of These Funds Now Thanks To Strong Government Support NeverthelessHe Says China Amp Rsquos Third Pillar Market Is Still In Its Infancy Because Retail Investors Are Not Familiar With The Products And Prefer High VolatilityIgh Return Products Government Figures Show That There Are Only 47600 Participants In The Third Pillar Market But Lin Is Upbeat About Outlook Because Asset Managers Remain Committed To Building Their Commercial Pension Businesses Through Investor EducationNd Bolstering Their Partnerships With Specific Distributors Amp Nbsp She Expects Beijing To Provide More Tax Incentives For Private Retirement Funds And Wealth Management ProductsHich May Prompt Fund Managers To Diversify Their Range Of Pension Products Away From Traditional Mutual Funds Ageing Population Amp Ldquo The Trend Capital Flows Into Target Date In Asia Is Followinga Similar Pattern As UsMp Rdquo Says Wenting ShenSia Pacific Multi Asset Solutions Strategist Att Rowe Price Amp Nbsp Target Date Funds Were First Offered In The Us 1990sUt Growth Was Very Slow Through The First Ten Years Because Of Lack Regulatory Support Investors Also Did Not Understand How Funds Worked Amp Nbsp Turning Point Came In 2006 With Pension Protection ActHich Allows Employers To Enrol Employees Into Defined Contribution Schemes If Do Not Provide Clear Investment InstructionsHeir Contributions Are Automatically Channelled Into The Qualified Default Investment AlternativeHich Comprisesa Mix Of Investment Strategies