How the coronavirus threatens Asia-Pacific’s $7tn pensions market
The coronavirus outbreak has piled pressure on Asia-Pacific’s multitrillion-dollar pensions industry, with the pandemic raising fears that retirees could make a panicked dash to withdraw their investments.
Read also Dutch pension funds invest in coronavirus bond
The sector manages about $7tn in assets, according to research group the Thinking Ahead Institute. But investment funds and policymakers across the region have been forced to reassess how they provide for ageing populations.
Read also Kenya’s retirement benefits eroded by coronavirus
The challenges come as equity markets emerge from their worst quarter since the global financial crisis and economists warn of a global recession. “It is not inconceivable that the community anxiety which has resulted in panic buying of groceries could see similar behaviour played out in [pensions] and cause a ‘run’ across the whole system,” according to a letter recently sent by pension industry groups to the Australian government and seen by the Financial Times.
Read also United Arab Emirates. Coronavirus: Private companies can postpone pension payments over next three months
Early calls on funds Australia has the world’s fourth-largest pension market with more than $2tn in assets. The government has allowed people in financial distress to withdraw a maximum of A$20,000 (US$12,160) from their superannuation accounts over the next six months to help tide them over.
Read more @FT
