The main issue for the State Council has not been what pension model to follow, but how to implement it. The national pension fund is meant to capture assets solely for pensions and act as a payer of last resort after municipal and provincial coffers run dry. It is meant to be funded through a variety of means, including IPO proceeds. Many market players believe that over time it will become Asias biggest institutional investor. But getting the fund off the ground as part of a nationwide pension reform programme has been difficult.
The national fund and Principal have been in talks over a training programme since the beginning of the year, and Miller expects it to begin within the next two months. Key fund staff, who have just recently been selected, will be trained by Principal experts from Sydney and at headquarters in Des Moines, Iowa for up to six months. In return trainees have made commitments to work for the pension fund for at least three years, so the effort of training them isnt lost to private-sector firms.
Principal is not being paid for this work. It is doing this to build goodwill and affirm its interest in pensions work. Authorities are now convinced our focus is on pensions, not insurance, Miller says.
The firm has had a relationship with the State Council since leading a major pension study that began in 2000. It has also worked with the Ministry of Labour and Social Security. Miller says Principal is willing to assist the national pension fund after the training programme ends but says no plans are laid. The door is open, he says.