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Japan’s Aging Population and NOMURA’s Pension Solution

Explore Japan's aging population and its impact on pension funds, as well as NOMURA's solution for effective pension asset management.

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Japan’s Aging Population and NOMURA’s Pension Solution

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  1. Japan’s Experience and NOMURA’s Solution The Pension Fund Risk Management Conference Pensions & Investments Yasuyuki Kato katou-0d0j@jp.nomura.com Senior Managing Director Head of Global Quantitative Research Nomura Securities Co.,Ltd. Visiting professor of Kyoto University December 6, 2006

  2. Japan OECD Nations World Growing Old : Japan % of total population over 65 years old Source: Ministry of Labor, Health and Welfare of Japan, United Nations (2006)

  3. % of Total labor force Born in Retiring in 2007 2008 2009 2.49% 2.66% 2.70% 1947 1948 1949 (7.85% in total) “2007 Problem” Impact of retiring Baby-Boomers on the labor force in Japan Source: Ministry of Internal Affairs and Communications of Japan (2005)

  4. Ups and Downs of Volatility Performance of Japanese Corporate Pensions (%) Introduction of Accounting for Pension Funding Shortfall improved Source: Pension Fund Association of Japan (March 2005)

  5. Which Direction to Sail ? Asset mix of Japanese Corporate Pensions More than 50% of plans invest in hedge funds More Risk Assets ? Source: Pension Fund Association of Japan (March 2006)

  6. How to Steer the Ship ? • Public Pensions $860bil • Corporate Pensions $730bil • Civil Servant Pensions $420bil Japanese Pension Plan Assets : $ 2 trillion (excluding DC plans)

  7. Keys to Pension Asset Management Seek more Alpha At the same time; Seek lower volatility

  8. NOMURA’s Solution Seek more Alpha & Seek lower volatility <Today’s program> - Fundamental Index Robert D. Arnott - Dynamic Asset/Liability Management Alla Gil

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