Thailand’s Government Pension Fund (GPF) breached 1 trillion baht (US$32.09 billion) in 2020 despite the coronavirus pandemic, driven partly by increased membership, but it warned of “huge impediments” this year.
The pension fund’s size grew 9.34% to 1.04 trillion baht as of end-2020 from 951.14 billion baht in 2019, according to its annual report. GPF members’ portion of the fund was 420.9 billion baht, and the balance 616.04 billion baht was made up of reserves.
The fund ended the year with 1.15 million members, up 6.48% from 1.08 million in 2019.
The report says the pension fund “successfully steered through all obstacles and generated good returns for its members. However, the seemingly unending Covid-19 pandemic has impacted investment and the economy in 2021”.
“Notwithstanding 2021’s huge impediments, all GPF employees intend to continue growing under its stated vision: Thai Pension World Standards, with a goal to create sustainable returns and multiply members’ savings value as well as improving relationship between members and GPF,” it says.
Secretary-General Srikanya Yathip detailed the adjustments made last year in response to the pandemic. When markets turned volatile in the first quarter, it trimmed investments in risky assets and raised exposure to safe assets, including government bonds and short-term Thai bonds.
In the wake of liquidity injections by major central banks, GPF readjusted allocations in the second quarter, increasing investments in assets that would benefit from nationwide lockdowns to curb the spread of the pandemic.
Srikanya says the fund also increased foreign investments to “diversify risks and generate returns from businesses that benefited from Covid-19”.
“We strategically focused on risk diversification and generated good returns from investment, as well as being a responsible investor,” she says.
GPF’s net income dropped 6.58% to 12.07 billion baht last year from 12.92 billion baht in 2019.
As of end-2020, just over 32% of its investments were in safe assets, and 34.14% in so-called diversifier assets, comprising Thai and global corporate bonds and absolute return funds.
Nearly one-fifth of investments were in growth assets, including Thai, emerging-market and developed-market stocks, as well as private equity, and almost 14% in inflation-sensitive assets, including real estate, infrastructure and inflation-linked bonds.