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<html><body><div>Manjit Singh is the president of Sun Life Asia.Asia's population is rapidly aging, and we are underprepared. By 2050, a quarter of the population will be over 60, yet the difficult reality is that relying on existing pension systems or traditional family structures to support people in their old age will not be enough for a comfortable retirement.Asia's emerging markets face an estimated $74 trillion pension savings shortfall that will place enormous strain on governments and families. Without action, this means that many people may live their final years in poverty.So how have we reached this point?Across Asia, many people simply lack access to pensions, particularly those working in the informal economy or in rural communities. Financial literacy remains low, and many don't save enough for retirement because they don't understand the fundamentals of saving and investing.Many governments have also been slow to build mandatory pension schemes for workers or to offer access to private ones.Moreover, the traditional Asian multigenerational household has historically provided a safety net for many people. Therefore, they didn't need to save for retirement because they could rely on relatives to support them in their old age.But this is changing. Smaller families and increasing life expectancy will leave today's young people with a much greater financial burden caring for their parents than the generations before them. Urbanization has also separated many families as people seek work in cities.In the midst of such challenges, governments face unpopular decisions to tackle the costs of supporting their elderly, such as raising the retirement age or increasing taxes to support future demand for care.But governments shouldn't have to solve these problems alone. The financial sector can play a greater role in building financial security in Asia.Many people in Asia often leave financial preparations for retirement until their final years of working and miss out on benefits such as gains from compound interest and long-term investments.Encouraging people to start saving for retirement early and providing them with greater options to invest can help close the pension gap.Asia's pension problem can be fixed by building multilayered pension systems, which provide basic state support for the most vulnerable, a framework for employer and individual retirement savings throughout employment, and access to private market options.Singapore and Hong Kong are examples of how governments can partner with employers to increase savings for retirement and provide a platform for future prosperity. Furthermore, they use tax incentives -- another lever -- to encourage greater contributions to pensions. Hong Kong's tax-deductible voluntary contribution scheme has encouraged additional savings of 10.51 billion Hong Kong dollars (about $1.35 billion) since 2019. 
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 A protester wearing a wig demonstrates demanding for the establishment of a full pension scheme outside the Legislative Council in Hong Kong in 2010. Hong Kong is now one of the examples of how governments can partner with employers to increase savings for retirement and provide a platform for future prosperity.



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More than 60 million people in China have opened private pension accounts since the country introduced private pension systems in late 2022, demonstrating the demand for an accessible private market.Asia's insurers already play a vital role in offering a range of investment and savings solutions for people to save for retirement. Insurers are also helping drive financial literacy in many rural areas.But we can do more.This challenge requires a coordinated, multipronged approach to address gaps and build workable solutions at national levels. Establishing a dedicated task force representing policymakers, regulators, industry and academia would help guide these efforts. Although government policies are foundational to promoting retirement savings, the industry and academia can offer essential expertise and global perspectives, informing the development of effective policies.For instance, industry can draw from successful policies and regulatory frameworks from other jurisdictions that demonstrate how mandatory and portable pension schemes can deepen savings pools. Insurers and asset managers can provide solutions within state pension systems, as well as private pension and insurance solutions. Insurance providers and academia can also help guide the pricing of state pension schemes to ensure they are adequate and sustainable for the anticipated demographic changes.Industry and government can work together to improve financial literacy. Government agencies can identify communities or demographics that would benefit most from financial literacy programs, and partner with industry and academia to establish forums to educate people on financial planning and tools available to them.There are many financial instruments to help savers build nest eggs capable of withstanding inflation and rising health care costs. From workplace pension plans and endowment plans to mutual funds and universal life insurance, these powerful tools can transform small, consistent contributions into a healthy retirement income. The key lies in empowering individuals with information on these tools to give them the confidence needed to invest.Through joint efforts we can also expand insurance access. Public agencies can broaden access channels to include digital platforms and integration with existing social programs. This would create more opportunities for insurers to offer solutions for unmet needs and for individuals to purchase insurance, enhancing overall coverage rates across populations.And lastly, public sector entities can also provide valuable data and insights to enable insurance companies to create more accessible and affordable coverage plans tailored to population groups.Asia has a golden opportunity to develop stronger pension systems and engage all generations in building financial resilience. Saving and investing now can ensure that retirement is not just a privilege for some, but a reality for all. Changing demographics are inevitable, a pension crisis doesn't have to be. The time to act is now.
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