Taiwan’s Bureau of Labor Funds (BLF) was hit by the coronavirus crisis with its pension funds posting the first January-June investment loss since the BLF began to manage them centrally in 2014, and assets under management shrinking almost 6% from end-2019 levels.
The BLF, which supervises the Labor Retirement Fund, Taiwan’s largest defined-benefit retirement plan, and six other funds, says it’s beefing up risk controls to address uncertainties stemming from the crisis and also the worsening relationship between China and the US.
The seven funds incurred an investment loss of NT$158.2 billion (US$5.38 billion) in the first half of 2020, shedding 3.43% through the six-month period, the BLF says in a statement on August 3. That compares with a NT$320.9 million profit in the first half of 2019, when its investments gained 7.55%.
The worst performer was the Labor Retirement Fund with a loss of 4.44%.
Two other funds, the Labor Pension Fund and the Labor Insurance Fund, suffered losses of 3.72% and 2.64%, respectively.
Total assets under management of the seven funds fell 5.59% to NT$4.39 trillion from NT$4.65 trillion at the end of 2019.
“Global financial markets were hit by the second wave of coronavirus in June, although some stock markets regained growth momentum with the easing of economic lockdown and stimulus packages in many countries,” the BLF says.
Given uncertainties from the pandemic and US-China geopolitical tensions, the BLF says it will “closely monitor the market condition and prudently pursue its strategic asset allocation”.
“The BLF is strengthening risk controls to minimise the Covid-19 impact on its investment returns in order to provide better retirement protections for its members,” the pension supervisor adds.