DEFINED CONTRIBUTION PENSION PLANS AND
THEIR INVESTMENT EDUCATION IN JAPAN
Nikko Financial Intelligence Inc., Tokyo, Japan
Abstract. Corporate pension systems were dramatically reformed around 2000 in
Japan. One of which was the introduction of DC Plans, which reach 1.2 million
participants and 1 trillion yen assets at the moment. Current situations of Japanese
DC Plans are reported in this paper, including DC plan regulations, administration
systems, statistics on DC Plans, results of interviews. Some issues to be solved are
also discussed and the roles and responsibilities of actuaries in the DC Plans are
Key-words: defined contribution plan, investment education, baby boomers,
Corporate pension systems were dramatically reformed around 2000 in Japan. One
of which was the introduction of DC Plans. Though a DC plan itself was not a new
idea in the worldwide perspective, it was a very new to Japanese pension systems
where only DB plans had been permitted for around four decades.
DC plan system have 1.4 thousand plans and 1.2 million participants at the moment,
but it is far below populalized than expected at the introduction of DC Plan System.
Some people, particularly people outside of Japan, sometimes say that the DC Plans
are unsuccessful in Japan.
But it is too early to decide whether DC Plans are successful or not. It only passed
three years and a half after the introduction of DC system, and number of plans and
participants have been steadily increasing. It is certain that DC Plans will be one of
important sources of peoples’ retirement incomes though it will not become the
biggest pillar for retirement income as expected at the system introduction.
Therefore the important thing is not to decide whether DC Plans are successful or
not, but to generate ideas how to make DC Plans more useful for peoples’ retirement
2 Corporate Pensions Reform around 2000 in Japan
The Japanese corpor