Japan Pension Selling Government Bonds
GPIF sells bonds to handle increasing payout costs.
BY Benefits Canada Staff | July 25, 2012
Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, is selling domestic government bonds as a way to handle its increasing payout costs, reports Bloomberg.
The country’s aging population and approaching retirement of baby boomers has put the fund under increased pressure. According to Bloomberg, the fund needs to raise about 8.87 trillion yen (C$115.2 billion) this fiscal year.
“Payouts are getting bigger than insurance revenue, so we need to sell Japanese government bonds to raise cash,” Takahiro Mitani, president of the GPIF, told Bloomberg. “To boost returns, we may have to consider investing in new assets beyond conventional ones.”
Japan’s public pension oversees approximately 113.6 trillion yen (C$1.47 trillion) and holds approximately 63% of its assets in domestic bonds.