The National Pension Commission (“PenCom”) recently published the Amended Regulation on Investment of Pension Fund Assets for the Pension Industry. The new investment guideline introduces a multi-fund structure, this would replace the existing “single-fund” structure that puts all contributors into one Retirement Savings Account (“RSA”) Fund without consideration for age or risk profile.
Fund I – This is an optional fund. Contributors must write formally to opt for this Fund.
Fund II – This is the default fund for contributors aged 49 and below.
Fund III – This is the default fund for contributors aged 50 and above.
Fund IV – This is the Retiree Fund.
|Fund Type||Maximum exposure to variable income instruments||Minimum exposure to variable income instruments|
|Fund I & II||2.5% of AUM invested in alternative assets|
Variable income instruments are investments that generate income or returns that cannot be pre-determined from the date the investments were made and are not guaranteed. In addition, the prices of such instruments fluctuate daily. Instruments in this category include Ordinary Shares, Collective Investment Schemes (“CIS”) such as Mutual Funds, Real Estate Investment Trust; Infrastructure Funds and Private Equity Funds.
Such investments have the potential to generate high returns over the long term but could be risky owing to uncertainty and fluctuations in market prices and returns.