Skip to main content
April 2024
AAM Magazine
April 2024
Back to news

Taiwan pension funds’ profit rebounds in first quarter

Taiwan’s labour pension funds bounced back to profit in the first quarter as the domestic stock and bond markets rallied amid optimism that negotiations to end the US-China trade war would be fruitful, and as the US Federal Reserve signalled a pause on rate hikes.

But the Bureau of Labor Funds (BLF), supervisor of six labour funds and one annuity fund, is not overly sanguine about the global market outlook for 2019, noting that the International Monetary Fund recently downgraded its forecast for world economic growth.

The six funds recorded a total profit of NT$215.3 billion (US$6.96 billion) in January-March 2019, 5.5% higher than in the same quarter of 2018, the BLF says in a statement on May 1.

The funds include Labor Pension Fund, Taiwan’s largest defined-contribution pension plan, and the Labor Insurance Fund, the island’s largest insurance fund for workers. The six funds registered a NT$72.6 billion loss in 2018.

The BLF says the results in the first quarter were driven by the rebound in domestic stock and bond markets. Taiwan’s benchmark stock index soared almost 17% in January through March. The index fell 8.6% in 2018.

“With the International Monetary Fund lowering its global growth forecast for 2019 from 3.5% to 3.3%, and the European Central Bank holding interest rate steady until the end of 2019 due to the threat of recession across eurozone, the global market growth is expected to stagnate this year,” the BLF says.

Separately, the BLF says the National Pension Insurance Fund, a public annuity fund under its supervision, posted a profit of NT$16.6 billion in the first quarter, or a return of 5.39% year-on-year. The fund incurred a loss of NT$6.85 billion in 2018.

The BLF had approximately NT$4.32 trillion of assets under management at the end of February 2019.