Pension reform is critical to strengthening Asia's social safety nets for an ageing population while providing stable long-term finance for Asia's development.
In many parts of Asia, the population is aging rapidly without sufficient pension protection. In 2012, 11 per cent of Asia's population was 60 years and older, and this ratio is expected to double to 24 per cent by 2050. In 2011, labor force pension coverage in most Asian countries was below 40 per cent, while the size of private pension assets in a selection of nine Asian economies with fairly developed pension systems amounted to only 5.3 per cent of GDP, compared with the OECD average of 70 per cent. For social protection and income equality reasons, and for the purpose of accelerating the deepening of capital markets in Asia, pension system reform is top priority, and Asian governments should consider the following five major strategies in their reform efforts:
For a more detailed discussion on the role of pension funds in Asia, please refer to the Fung Global Institute Working Paper on Time for Asian Pension Systems to take Center Stage at our website: www.asiaglobalinstitute.hku.hk.
Disclaimer: The views expressed in this report are those of the author and do not necessarily reflect those of the Fung Global Institute. The author is solely responsible for any errors or omissions.