PENSION FUND PERFORMANCE IN EAST ASIA: A COMPARATIVE STUDY

Abstract

This paper discusses and analyzes asset allocation and performance of the major pension funds in four East Asia countries, namely Malaysia, Singapore, Hong Kong and South Korea. The respective funds for these countries are Employee Provident Fund (EPF), Central Provident Fund (CPF), Mandatory Pension Fund (MPF) and National Pension Service (NPS). The impact of some economic crises on the fund performance will also be assessed. Besides looking at the individual countries, a comparison of the performance among all the funds will also be done. From the analyses, it is found that the CPF is the most conservative pension fund as it invested most of its funds in fixed income and the investments were made in the local markets, while MPF is the most aggressive pension fund as most of its funds were invested in equities. Performance of the funds was measured in terms of return on investment (ROI). All funds recorded the lowest ROI during the subprime crisis in 2008. Besides the subprime crisis, these funds were also affected by the Japanese earthquake as lower ROI were also observed in 2011.