The world's largest pension fund should aim for yearly returns of 1.7 percent plus the rate of wage growth, a government advisory panel reiterated.
The ¥128.6 trillion Government Pension Investment Fund should adopt that goal as it is suitable under all eight scenarios envisaged for the country's economic outlook, according to a committee formed to help the health ministry decide on economic assumptions for investment targets. The group met Monday to finalize a draft report issued last week. The return figure may need to be increased if a health ministry review of pension finances finds that it's not enough, panel member Kazuo Ueda said.
The panel's final report implies a target of 4.2 percent annual returns for GPIF, which amounts to a 0.1 percentage point increase on its current goal. The rate would be the lowest among pension funds against which GPIF compares itself and comes as the Japanese manager faces pressure to take more risk to cover retirement payouts for the world's oldest population.