Asia, CEE pensions to rise five fold by 2015-AGI

LONDON Nov 24 (Reuters) - Pension scheme assets in Asia and Central and Eastern Europe (CEE) are set to see five-fold growth to more than 1 trillion euros by 2015 as emerging markets prepare for their ageing societies, an Allianz (ALVG.DE) study said on Monday.

Allianz Global Investors, the financial group's fund management arm, said pensions schemes in CEE will have gathered assets totalling 244.9 billion euros ($308.4 billion) by 2015, while Asia will have 1.04 trillion euros.

Pension assets, consisting of contributions from employees and employers invested in the market, in the CEE and Asia total, respectively, 50.8 billion euros and 215.9 billion euros.

AGI said both regions have undertaken "far more extensive and fundamental pension reforms" than those in Western industrialised countries.

The report also said both regions have followed the World Bank model advocating a first pension pillar or state pensions aimed at preventing old age poverty and a fully funded second pillar comprising work place pension funds.

The driver behind the Asian aspiration to establish formal pension systems is to replace traditional family-based support systems.

In the CEE, change has been triggered by the end of socialist rule and the demographic changes resulting in an" unprecedented speed of ageing."

"China will become old within one generation," the study said.

Emerging market governments, however, need to improve financial education, design adequate plans and provide transparent and suitable products to ensure a successful DC pension system, AGI said.

AGI also said the current market volatility in financial markets imposes "severe challenges on these systems."

"Now that a solid foundation is in place, the fine-tuning of the system becomes the major task," said AGI senior pension analyst Alexander Boersch.

"It is of utmost importance that the DC systems function properly as, within a few years, the living standards of a significant and growing part of the population will depend on the capital they generate." (Reporting by Cecilia Valente; Editing by Andrew Macdonald)