Possible overhaul of pension fund outsourcing in Taiwan
19 November 2012
News, Asia, Taiwan
By Asia Asset Management
Taiwan’s Legislative Yuan Finance Committee has called a meeting today (November 19) in regard to overhauling the outsourcing of four local pension funds – Labor Pension Fund (LPF), Labor Insurance Fund (LIF), Public Service Pension Fund (PSPF) and National Annuity Program, National Pension Insurance Fund (NPIF) – according to a report from the China Times.
The talks were prompted by revelations in early November that that the LPF and the LIF incurred combined losses of more than NT$100 million (US$3.33 million) in 2010 due to their external fund managers conducting illegal stock trading.
Meanwhile, the Council of Labor Affairs (CLA) is said to be considering further tightening control over delegated managers’ investments in initial public offerings and small-cap equities. The CLA is also deliberating on reinforcing the due diligence processes for pension funds during fund manager selection.
Up to the end of October, the LPF and LIF’s external fund managers had underperformed the funds’ internal investment teams when it came to investing in Taiwan’s stocks. The LPF’s external domestic fund managers reported a return of 1.2% compared to 2.6% for the pension fund’s domestic mandates overall. The LIF’s delegated managers reported a return of 0.46% in domestic equities, versus 3.44% for the pension fund’s overall domestic mandates.
More News >
Discuss: Possible overhaul of pension fund outsourcing in Taiwan