Asset Managers - Is $1.9 trillion worth your time? Join the Global Financial Wave!

Ebrahim K Ebrahim

Pension Researcher & Chairman of the Annual MENA Pensions Conference

Is $1.9 trillion worth your time? Regional experts have calculated that private sector pensions will potentially be worth $1.9 trillion in Assets Under Management in the Middle East by 2023. Learn how you can be a part of this outstanding opportunity, at the Middle East Pension Conference.

There is a growing global trend that is shaking up the financial services world. It is bigger than the budget of any country and represents an unprecedented concentration of assets and unprecedented opportunity for the financial services and asset management communities. Towers Watson has studied the trend over time in countries as diverse as Brazil, the United States, Malaysia and South Africa. In the 16 countries studied, this trend had created a total AUM of $36,100,000,000,000. Trillions of dollars. Where are they? Pensions.

Pension saving is such a universal concept that globally, pension assets are estimated to represent 84% of GDP. On average, people in the 16 countries studied saved $32,120 for retirement, including government pension plans, company pensions and their private savings.

 It is commonly considered that the Middle East lags behind other world regions in pension saving. There is less of a focus on saving and more on spending, and generous government pension schemes mean that many citizens don’t feel a compulsion to save for their later years. However, with pressures on governments everywhere to scale down costs, and a proliferation of expat employees amassing little more than an accruing end-of-service benefit for the years following their expat experience, there is a growing need for alternatives that provide security for employees and their families in future years.

To respond to the global trend and catch the wave of pension saving, private pension managers are offering assistance to companies and individuals who want to create a more secure retirement. This is a field ripe for innovation and solutions are being developed for individuals and for corporations. Individual plans can include regular saving, careful investment and staged pay-out of benefits over the retirement years. Plans for corporations can include administrative support for employee saving, payment of Plan fees for employees, and various levels and types of contributions to supplement employee savings. The smart money is on schemes that tie employer contributions to longevity with the company, to boost employee engagement and productivity while reducing turnover. Employer contributions can even potentially offer a return on investment for the employer’s contributions during the vesting period.

 Whether employers choose to assist employees without incurring corporate expenses or to contribute to their employees’ pension savings, the corporate sector is the key factor in growing the pension industry throughout the GCC and MENA regions. Are you well positioned to be part of the potential wave?