Three large pension funds for public employees in Japan on Friday signed on to the equity-heavy asset allocation targets announced last October by the ¥137 trillion ($1.13 trillion) Government Pension Investment Fund, Tokyo.
In an announcement released Friday, the ¥18.9 trillion Pension Fund Association for Local Government Officials, the ¥7.6 trillion Federation of National Public Service Personnel Mutual Aid Associations and the ¥3.85 trillion Promotion and Mutual Aid Corporation for Private Schools of Japan adopted the GPIF's "model portfolio" weightings of 35% for Japanese bonds, 25% apiece for domestic and international equities, and 15% for foreign bonds.
Those moves were in line with a government push to equalize the pension burdens and benefits for private and public employees in Japan, with a target date set to unify the country's bifurcated system in October.
The move into higher risk, higher reward territory announced by the GPIF on Oct. 31 — against the backdrop of Prime Minister Shinzo Abe's push to wrench Japan's economy out of a prolonged deflationary spiral — marked a dramatic shift from the giant pension fund's prior targets of 60% Japanese bonds, 12% each domestic and international equities, 11% foreign bonds and 5% for cash.
Japan's three other big public pension funds, meanwhile, had previous targets for domestic bonds that ranged between 64% and 80% of their portfolios.
The biggest, the Pension Fund Association for Local Government Officials, previously targeted 64% Japanese bonds, 14% domestic stocks, 11% international stocks, 10% foreign bonds and 1% cash.
The pension fund's actual allocation as of the March 31, 2014, close of the prior fiscal year was 57.3% Japanese bonds, 16.1% domestic stocks, 13.7% international stocks, 11.1% foreign bonds and 1.8% cash.
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http://www.pionline.com/article/20150320/ONLINE/150329999
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