Strengthening Employment-Based Pensions in Japan
We investigate how the Japanese pension market for funded employment-based pensions is changing and how it might be strengthened in order to better serve one of the most rapidly aging populations in the world. Public and private pensions in Japan are estimated to hold around US$3 trillion, making that system the second largest globally after the United States. However, unfavorable economic developments have cut sharply cut into asset values, and the weak economy is undermining traditional lifetime employment contracts. Recent legislation permitting the establishment of defined contribution plans in Japan may provide new employer-sponsored retirement plan opportunities. We first describe the Japanese pension system at the end of the 20th century and provide an overview and evaluation of the changes in the pension arena emerging from the 2001 legislation. Next we show that important design questions remain to be answered, if Japanese employment-based pensions are to be reformed and modernized. Finally we indicate lessons gleaned from recent changes in US pension plans.
|Date of creation:||Apr 2002|
|Date of revision:|
|Publication status:||published as Clark, Robert L. & Olivia S. Mitchell. “Strengthening Employment-Based Pensions in Japan.” Benefits Quarterly, 2nd Q (2002): 22-43.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Brown, Jeffrey R. & Mitchell, Olivia S. & Poterba, James M. & Warshawsky, Mark J., 2001. "The Role of Annuity Markets in Financing Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025094.
- Brown, Jeffrey R. & Mitchell, Olivia S. & Poterba, James M. & Warshawsky, Mark J., 2001. "The Role of Annuity Markets in Financing Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262529130.
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- Olivia S. Mitchell, 2000. "New Trends in Pension Benefit and Retirement Provisions," Center for Financial Institutions Working Papers 00-06, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Olivia Mitchell, 1999. "New Trends in Pension Benefit and Retirement Provisions," NBER Working Papers 7381, National Bureau of Economic Research, Inc.
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