Can Future Pension Assets Meet Their Future Liabilities?

This chapter reviews the long-term pension-funded status for KWAP in maintaining liabilities for the next ten years. It discusses the pension-funded ratio, pension asset allocation investment, and required return for pension funds in terms of long-term sustainability factors. Despite not having a full federal mandate yet to cover pension liabilities, in the aggregate, KWAP is making solid progress toward funding by growing pension assets from RM500 million as fund capital into a fund worth RM137 billion. Using the Holt-Winters technique, based on the data of KWAP’s pension fund from 2007 to 2018, this study forecasts ten years ahead of assets and liabilities. This study provides seven recommendations for improving the state-sponsored pension fund as a policy implication. A new legal framework, such as restricting individual retirees from having more than one pension benefit, must be instituted before it is too late.