GPIF funding status

[Deep Blue]

My Google-fu has failed me. It is easy to find the current assets in GPIF, they publish the total and breakdowns in English every quarter.

But I have not been able to find, in English, any estimates of the liabilities of the scheme, i.e. the present value of future payouts discounted at the appropriate rate, given all the usual actuarial assumptions on lifespan etc that go into these difficult calculations.

Is this just not published or have I just utterly failed to find it? For corporate DB pension schemes they need to calculate and publish the shortfall or over funding status of the plan. Does the same rule not apply for GPIF?

[Deep Blue]

Bumping in the hope someone with better Japanese than me can find this information.

[ClearAsMud]

If you don't mind a comment from someone who doesn't have the fortitude to take it past providing the links below, it's not clear what information GPIF should be making available that it already doesn't. GPIF itself isn't a pension scheme, so it's not directly concerned with estimating the present value of future pension payouts: it's currently charged simply with making conservative, long-term investments geared toward providing an annual return of 1.7%, thereby enabling the government to fund about 10% of Japanese public pension benefits. As such, it's a minor supplement to the main pay-as-you-go public pension scheme. (The actual average annual return for the fiscal years between 2001-21 was 3.69%; the return for 2021 was 5.42%, and GPIF placed 750 billion yen into government coffers.)

To get the kind of data you want, it would seem to be necessary to go up a rung on the bureaucratic ladder to the Ministry of Health, Labour and Welfare. Perhaps you could start with this MHLW page of links and documents concerning the future financial prospects of the public pension system, which offers an English PDF titled "Summaries of the 2019 Actuarial Valuation and the Financial Implications of the Reform Options."

A more complete list of actuarial reports in English will be found on this page. "Annual Actuarial Report on the Public Pension Plans in Japan" is the title given to these reports.

[Deep Blue]

Thank you, I will have a look at those later this week.

You are right, GPIF itself is just a subset of what I should be looking into. Basically I wanted to get the information that would allow me to form a view on whether the NPI scheme is anywhere close to being solvent currently.

[Deep Blue]

Wow, that is a lot of information. Thank you again for finding it. The permutations they go through are too much for my little head at one sitting. I think this is the key point though

NP, on the other hand, differs from EPI in that the reserve ratio continues to decline. It is clear that even if the benefit level of the Basic Pension is adjusted, expenditures will exceed revenues from contributions and the national subsidy, so the reserve will not increase, and the reserve ratio will gradually decrease from the current relatively high level as the reserves will be utilized over a long period of time.

So for the National Pension has expenditures above contributions currently, and the reserves are being depleted. And even if the NP benefits are cut, it won't be bought back into balance.

So, I guess the next question to dig into it how quickly the "relatively high level of reserves" will be depleted under various scenarios. Do we have 10 years, 20 years, 50 years, 100 years or whatver under moderate assumptions?