AsianInvestor's Top 20 pension executives in Asia list brings together an array of senior executives, from CEOs and CIOs to heads of responsible investing and equity chiefs -- change-makers who are leading the industry with their forward thinking and innovative practices.
As Asia faces a growing silver tide, it's imperative that the pensions industry takes steps to modernise and improve its operations to cater to increasing retirement demands. That will require skilled and talented professionals.
You can find more about the rationale for our Top 20 list here.
We continue to unveil our list with two top executives — one from Hong Kong and another from India.
Managing director, Mandatory Provident Fund Schemes Authority (MPFA)
Cheng Yan-chee is considered as one of the key figures behind the development of the eMPF platform, which MPFA chairman Ayesha Macpherson Lau calls “the greatest reform of the MPF system to date in terms of scope and significance”.
The eMPF is expected to lower fund member costs and improve returns, given that previous studies showed that scheme administration was the highest cost component for MPF trustees.
Hong Kong’s MPF scheme is a unique pension system. Although the retirement funds are managed by fund management companies and life insurance companies, MPFA regulates the market in terms of approving qualified trustees, products, and stipulating asset allocation and investment scope by asset class and geography.
Cheng, a seasoned bureacrat, joined MPFA in 2013 as chief corporate affairs officer and executive director from the Hong Kong government, where he had stints as deputy secretary and director with the former Home Affairs Bureau and Financial Services and the Treasury Bureau.
He became MPFA’s acting managing director in 2021 and was named managing director in June 2022 to oversee the eMPF reform of Hong Kong’s mandatory retirement savings scheme for its 4.7 million members.
“MPF has become a very important pool of reserve for the community to combat the ever-increasing challenges caused by the aging population”, Cheng told AsianInvestor.
As at the end of March, total MPF assets amounted to about HK$1.1 trillion ($140.3 billion), which is higher than the fiscal reserves of the government, which is provisionally estimated at HK$835 billion ($106.5 billion) at the end of March 2023.
“Total MPF assets have grown 144% over the past 10 years, indicating the effectiveness of the MPF system based on long-term regular savings and investments. This significant pool of resources can be relied upon by the working population for meeting their basic retirement needs,” he said.
The key project Cheng is working on now, eMPF, is a digital platform through which administrative processes for members, employers, trustees and fund managers will be streamlined and automated in a one-stop online system.
Preliminary studies and preparation for the ambitious eMPF platform dates back to 2012.
MPFA officially commenced the development of the platform in 2021, setting up the eMPF Platform Company Limited, of which Cheng is a non-executive director.
The platform is expected to be fully operational in 2025.
“The 4.7 million MPF scheme members will enjoy fee reduction, enhanced user experience and better member protection,” Cheng said.
In the first two years after the implementation of the eMPF platform, MPFA expects an average reduction of about 30% in scheme administration fees payable by scheme members.
Cumulative financial savings from the eMPF is estimated to be between HK$30 billion ($3.8 billion) to HK$40 billion ($5.1 billion) over 10 years after its full operation.
This is equivalent to 41% to 55% of the administration fees that scheme members would have to pay over the same period if there were no eMPF platform.
Under Cheng’s leadership, together with MPFA chairman Lau, the MPF system also saw other reforms, especially the expansion of investment scope to diversify members’ choices and boost portfolio performance.
In 2022, MPFA allowed fund schemes to invest in debt securities issued by the central government, the People’s Bank of China, and the three mainland Chinese policy banks.
In the same year, MPFA also approved diversified single-country funds with significant market capitalisation, and specialty funds, like ESG-themed funds that fulfil certain requirements.
CEO, HDFC Pension Management Company (India)
HDFC Pension Management CEO Sriram Iyer has good reason to be proud – the pension fund manager crossed the $6 billion mark in May, cementing its position as the fastest growing investment manager for the corporate and retail sector under the National Pension Scheme (NPS) architecture.
NPS – a voluntary, defined contribution retirement savings scheme -- was introduced by the central government in 2008. Originally introduced for central government employees, it was also adopted by many state governments and in 2009, extended to the private and unorganised sector.
“This achievement becomes even more significant as we complete ten years of business this year,” he said.
The pension fund manager, a wholly-owned subsidiary of local insurer HDFC Life Insurance Company, also has a ‘point of presence’ license – allowing it to become the first point of contact with subscribers and helping with servicing accounts – under NPS.
When the pension manager initially launched operations in 2013, it was a rocky phase as regulations changed around investing challenging the long-term viability of pension managers.
However, HDFC Pension Management stayed the course.
“We continued to focus on building our presence in the market even during times, when, in the initial years, profitability was challenged and our sponsor (HDFC Life) remained committed to this business,” Iyer, who worked previously with the insurer before joining the pension arm in 2022, said.
Ten years on, it is a dominant player in the retail and corporate segments of NPS.
Passionate about financial literacy, Iyer says HDFC Pension Management takes the task of popularising and distributing pension products as seriously as managing the money.
“With pension products, you have a time horizon of 15, 20, 30 years. The probability of making a double-digit compounded return over these long periods of time is very high, assuming investors make the right choices in terms of fund managers and the mix of assets,” he said.
Iyer is known in the industry for conducting financial awareness sessions with investors.
He said that the Pension Fund Regulatory and Development Authority has also been proactive with steps to improve the awareness and attractiveness of pension schemes to subscribers.
Apart from allowing equity mutual funds and ETF exposure for government employees up to 15% a few years ago more recent developments include allowing investments in initial public offerings, follow-on public offerings and offers for sale and allowing equity exposure up to 75% for corporate sector subscribers.
To encourage more foreign investor participation, foreign direct investment in the pension sector was also increased to 74% from 49% earlier.
“I think this is a nascent industry, with an extremely nimble and receptive regulator. We interact with the regulator very frequently – every quarter, in fact.
"There is also a formal pension fund performance review that is conducted by the regulator every quarter. The chairman himself spends time in these reviews. He also chairs meetings with PoPs, where we participate and share updates on various market development initiatives undertaken by us,” said Iyer.
About 7% of India’s population is above the age of 65, which translates to 850 to 900 million individuals.
That number is expected to rise to 11% by 2030 and double to 14% by 2050. “In absolute numbers, that is a very large number of in people who will need retirement solutions,” said Iyer.
(All AUM figures are in US dollars.)
Tomorrow, we present executives from pension funds in Indonesia and Japan.