Japan's Government Pension Investment Fund is hiring amid ballooning assets

Japan Times

7 hours ago

Japan's Government Pension Investment Fund, one of the world's largest retirement funds, is about to increase its unusually small staff as the assets it oversees balloon.
GPIF, which managed ¥260 trillion ($1.8 trillion) in assets at the end of June, only has 187 employees, versus 676 at Norway's Government Pension Fund Global, which oversaw the equivalent of $1.92 trillion at the end of 2024. Similarly, large retirement funds in Canada and California manage less than a third of what GPIF does, but each has more than 2,000 people on payroll.
GPIF's small staff size stems from its early days after its founding in 2006, when the organization outsourced most of its investments and put a majority of its funds in domestic bonds. Reflecting a global shift by pension plans toward riskier investments to bolster returns, Tokyo-based GPIF now earmarks about half of its funds to Japanese and foreign shares, and it also puts money in alternative assets such as private equity.
"More high-level specialized staffers need to be secured,' said Kazuto Uchida, who was appointed the fund's president and began his term in April. "As the scope of our operations grows, risk management will also be extremely important' to monitor various areas such as alternative assets and environmental, social and governance (ESG) principles, he said in an interview.
The organization expects personnel expenses to reach ¥18.2 billion in total during its five-year business plan period that started in April, an 80% increase from the previous half-decade. Uchida declined to elaborate on how those expenditures will be divided up. He didn't indicate how many new staff may be hired.
The planned staff additions indicate the pressure on GPIF to boost returns to help support retirees financially in one of the world's fastest aging populations. It's also considering ways to manage risks as Japan's markets for assets including bonds turn more volatile due to factors such as higher interest rates and U.S. policy swings.
Retaining qualified employees may pose challenges for the fund. Salary packages at GPIF tend to be less than those at both domestic and foreign financial firms in Japan, and for equivalent positions at major pension funds abroad.
Remuneration levels at GPIF peak at about ¥16 million, or around $108,000 for managing directors, according to the fund's data analyzed by Bloomberg. That compares with median pay levels of about $140,000 for similar top non-executive positions at Japanese financial institutions, and more than $300,000 for those in foreign banking firms operating in the country.
Canada Pension Plan Investment Board, which managed around 714 billion Canadian dollars ($518 billion) in assets as of March, and California Public Employees' Retirement System, or CalPERS, which oversaw about $565 billion, both surpassed GPIF in terms of pay. Total salaries for CalPERS investment managers start above $200,000 and managing directors at CPP Investments earn almost $300,000 even at the bottom of the range, according to data from job search site Glassdoor.
Japan's health, labor and welfare ministry, which oversees GPIF, held an expert panel meeting late last year about the fund. The panel members agreed that in the long term it was crucial to avoid employees moving to other firms, while a ministry official said it's necessary to review if GPIF's compensation is in line with that of the overall industry.
GPIF has already taken some steps to hold on to staff and increase expertise, extending in April the retirement age for regular employees to 65 from 60.
It's also started hiring new graduates for the first time specifically as investment specialists, jobs that were only available to experienced mid-career applicants in the past. The fund said it's seeking university students studying math, science or economics.