The pension fund of the Mutual Aid Association of Prefectural Government Personnel (地方職員共済組合) had investments assets of 2,437 billion yen at the end of the financial year on 31 March, its newly published annual investment report of reveals.
Usually known as Chikyosai, a contraction of the romanised version of its name, the fund is one of several pubic sector retirements plan which put part of their assets into the stewardship of the Pension Fund Association for Local Government Officials (地方公務員共済組合連合会, usually known as Chikyoren). For details of this arrangement please see archive 8 November 2012.
The Chikyosai split is 66%:33% with 1,634 billion yen remaining in its hands and 802 held by Chikyoren. The latter is allocated 41.8% or 336bn yen to domestic bonds, 18.1% or 145bn yen to domestic stocks, 12.3% or 95bn yen to foreign bonds, 16.5% or 132bn yen to foreign stocks and 11.3% or 91bn yen to short-term.
The 40%+ allocation to domestic bonds is perhaps surprising given that almost 40% of the funds directed by Chikosai itself are invested the same way with the remaining 60% going into short-term holdings.
This highly liquid position is necessary to a fund which is past its tipping point so has to draw on its reserves to meet a fast-growing annual benefits bill. It is the longer term funds which are managed by Chikyoren.
The report does not say whether any part of the Association’s bond holdings are driven by so-called duty investment which for many years required it to make hefty investments in government paper.
All the large mutual aid associations recently undertook to bring their portfolios in line with that of the Government Pension Investment. However it is doubtful that this can be applied to the money kept in Chikyosai’s stewardship since it already has more going out in benefits each year than coming in via contributions and the money it keeps to hand is needed to pay pensions.
If other Chikyoren constituents are also shown in their forthcoming yearly investment reports to need to the lion’s share of their funds for immediate payouts that would put a very big dent indeed in stockbrokers’ oft repeated argument that MAA ‘whales’ will be buying up Japanese shares and boosting, or at east supporting, the stock market.
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