Asia’s retirement systems face reset as longevity pressures grow

Manulife is proposing a new way forward for Asia’s retirement systems as they approach an inflection point shaped by ageing populations, rising longevity and market uncertainty.

A new framework reflects a broader ambition to extend the firm’s role beyond managing assets towards fostering resilience, supporting policy evolution and equipping individuals to navigate increasingly complex financial journeys.

This is a timely initiative for Asia, with policymakers in several markets looking at pension reform:

• Indonesia is moving towards mandatory, broader coverage and increased harmonisation.
• The Philippines is revising regulations to enhance voluntary, individual savings through the Personal Equity and Retirement Account (PERA).
• Malaysia is reforming its Private Retirement Scheme (PRS).
• Hong Kong is introducing full digital automation via the eMPF Platform and implementing full portability of benefits.
• Mainland China continues to review options to strengthen Pillar 2 (occupational) and Pillar 3 (private) systems.

A key driver in all cases is a combination of Intensifying demographic and financial pressures. According to the latest population estimates and projections from United Nations, by 2050, around 1.6 billion people globally are expected to be aged over 65, with Asia accounting for nearly two-thirds of that population.

Yet, as Elvin Tharm, head of emerging markets Asia retirement at Manulife, noted, replacement rates in many retirement systems remain below 50% of pre-retirement income, while nearly one in two retirees leave the workforce earlier than planned.

The result is a widening mismatch between modern retirement realities and systems still largely designed around shorter lifespans and more predictable career paths.

“However, retirement is a decades-long journey,” said Tharm. “We focus on helping customers take meaningful steps today to achieve better retirement outcomes – confidence today, sustainable income tomorrow, and resilience for longer.”

Retirement planning in need of a rethink

Manulife’s report, Securing retirement: what makes a strong retirement system, aiming to support discussions with regulators and policymakers in key Asian markets, explores how to solve these pressures beyond increasing contribution levels.

In short, retirement systems must also evolve structurally to better support income sustainability, accessibility and decision-making throughout retirement.

“Longer lives have fundamentally changed the equation,” Tharm added. “Modern retirement systems need to deliver income that lasts for life, while protecting against inflation and managing longevity and market volatility.”

Without structural reform, longer lifespans risk translating into greater financial insecurity in retirement.

Five features of a stronger retirement system

To address these challenges, Manulife has revealed a new retirement playbook, designed for adequacy and longevity protection.

1. Income sustainability and longevity protection – The focus should shift from simply building account balances to delivering sustainable income throughout retirement. As lifespans extend, individuals may need their savings to last 30 to 40 years after leaving the workforce. This requires stronger decumulation strategies, maintaining some exposure to growth assets even after retirement, and greater protection against inflation and market volatility. Examples include target-date funds in North America and retirement income solutions within Hong Kong’s MPF system.

2. Participation and inclusion – Many retirement systems still struggle to adequately cover gig workers, part-time employees, women and lower-income earners, leaving significant participation gaps across Asia. Manulife believes systems should make long-term saving simpler, more accessible and more automatic – using measures such as auto-enrolment, contribution auto-escalation, portability between employers and streamlined digital onboarding – to encourage individuals to begin saving earlier and contribute more consistently throughout their working lives.

3. Flexibility with safeguards – Combining flexibility with professionally managed default strategies, diversified portfolios and structured withdrawal guidance can help strike the right balance between flexibility, risk management and long-term retirement outcomes. This approach can also address behavioural biases such as de-risking too early or withdrawing savings too aggressively during volatile markets.

4. Advice and engagement – Digitally-enabled planning tools, personalised projections and human advice are now essential in helping individuals make more informed decisions around savings, healthcare costs and retirement income strategies.

5. Transparency and accountability – Participants increasingly need clearer visibility into how risks are managed, the fees they are paying and whether they are on track to achieve sustainable retirement income. Industry initiatives such as Manulife’s Member Outcomes Index are becoming more outcome-focused, judging alignment with retirement goals and helping providers identify gaps to take corrective action earlier.

From accumulation to long-term resilience

For Manulife, the challenge now extends beyond just improving investment returns. The larger issue is whether retirement systems across Asia can adapt quickly enough to support populations living longer, working in less predictable patterns and increasingly managing retirement risks themselves.

“Retirement providers must act as ecosystem enablers, bringing together regulators, policymakers, employers and financial institutions to build systems that are resilient, inclusive and fit for longer lives,” said Tharm.

As retirement shifts from a short post-employment phase to a multi-decade financial journey, the focus is increasingly moving from how much people accumulate to whether systems can ultimately deliver sustainable income, resilience and long-term financial security.