Dragon Capital VietFund Management, a Ho Chi Minh-based fund management company, has launched Vietnam’s first private sector retirement savings vehicle.
The defined contribution plan, with government tax incentives for employees and employers, offers savers three fund options: a relatively high risk 50-50 split between stocks and bonds, a mix of 65% stocks and at 35% and a prudent bond at 80%. -20% mix of actions.
Savings can be withdrawn tax-free at retirement age, currently 62 for men and 60 for women.
Life insurers in Vietnam have had some success selling savings products in recent years, but these heavily regulated offerings invest almost exclusively in government securities, said Dominic Scriven, executive chairman and co-founder of Dragon Capital. VietFund Management, in an interview.
Meanwhile, with 20% of the Vietnamese population, now 96 million people, expected to be retired by 2030 and 30% by 2050, tapping into private savings to supplement the pension scheme alone. country’s pension – Vietnam Social Security Fund, with only about 10 million contributors. right now – is a priority, he said.
Mr Scriven, a 25-year veteran of the money management market in Vietnam, said the Dragon team has engaged with local regulators for years in an effort to channel private savings into retirement funds. Earlier this year, Dragon obtained Vietnam’s first “voluntary supplementary benefit scheme” license.
He said the new savings vehicle will be aimed at the 35-40 million Vietnamese city dwellers, where per capita GDP in metropolitan areas such as Hanoi and Ho Chi Minh City ranges from $ 7,000 to $ 10,000.
For Dragon, which has focused on exposing foreign institutional investors to Vietnamese stocks and bonds, the new retirement offering comes down to “broadening our vision from being fully focused on foreign institutions to really looking at the underlying market. “said Mr. Scriven.
Dragon Capital VietFund Management oversees approximately $ 4.5 billion in assets under management.