The Economic Times Sunday, August 11, 2002
Japanese firms cutting pension benefits: report REUTERS TOKYO: Declining investment returns are forcing a growing number of Japanese companies to cut pension benefits, according to a government survey reported in the financial daily Nihon Keizai Shimbun. As of the end of March 2002, 366 companies, or more than 20 per cent of those surveyed by the Ministry of Health, Labour and Welfare, had cut pension benefits, the newspaper said. Some had cut payments by almost a quarter. Most were targeting future pension payments promised to employees, but seven firms had cut benefits for people who had already retired. Another 100 or so companies are expected to cut pension benefits in the current financial year, the paper quoted the government report as saying. Japanese employee pension funds are divided into two portions, one of which is managed by the public pension system, under which benefits are fixed. The other portion is the responsibility of the firms, which had calculated pension levels on the assumption that their investments would return between three and five per cent annually. But with interest rates hovering near all-time lows and Japan's Nikkei stock average at little more than a quarter of its peak levels, many companies have found it impossible to squeeze returns from pension capital. Copyright © 2002 Times Internet Limited. All rights reserved.
