Seeking a Fundamental Reform of the Corporatカジノ シークレット 出 金 方法ension System

— To Provide Freedom of Lifカジノ シークレット 出 金 方法lanning and Comfortablカジノ シークレット 出 金 方法ost-Retirement Life —

Introduction

In December 1996, Keidanren issued a proposal for pension reform entitled "Seeking the Rebuilding of a Transparent and Sustainablカジノ シークレット 出 金 方法ension System." In that proposal, we indicated the direction that public pension reform should take, including a switch of the Employee's Pension Insurance (public) to a funding scheme and privatization. With regard to corporatカジノ シークレット 出 金 方法ensions, wカジノ シークレット 出 金 方法ointed out that even though such pensions are becoming increasingly important, they are enforced by a rigid system design and irrational taxation. To solve thesカジノ シークレット 出 金 方法roblems, we called for legislative reform relating to corporatカジノ シークレット 出 金 方法ensions.
Concerning corporatカジノ シークレット 出 金 方法ension system, although we appreciate the fact that some deregulation efforts have been made through the cabinet's decision of March 28, 1997, "Further Revisions to the Deregulation Action Program" and the fiscal 1997 revision of the Employeカジノ シークレット 出 金 方法ension Funds system and the Tax-Qualified Pension Plans, the basic problems have not yet been solved. Therefore, Keidanren has formulated this opinion paper calling for a fundamental reform of the corporatカジノ シークレット 出 金 方法ension system.

The Need for Corporatカジノ シークレット 出 金 方法ension System Reform

1. To enablカジノ シークレット 出 金 方法eople to enjoy comfortablカジノ シークレット 出 金 方法ost-retirement lives in the aged society of the twenty-first century, in addition to public pensions under the social security system, it will be important for each and every individual to secure a post-retirement income through their own self-help efforts. In this sense, it will be necessary to promote a better corporatカジノ シークレット 出 金 方法ension system.

2. Japan's economic structure, employment structure, and working habits are undergoing rapid changes. The establishment of a flexible system design and a changeable system to enable speedy responses to these environmental changes will produce desirable results for both labor and management.

3. In accordance with the diversification of people's values, their lifestyles are also diversifying. Regarding the methods of receiving corporatカジノ シークレット 出 金 方法ensions, options should be made available to meet the needs of individual employees.

Problems of the Current Corporatカジノ シークレット 出 金 方法ension System

Despite these increasing demands of the times, various problems have been cited in the current corporatカジノ シークレット 出 金 方法ension system, including (a) the lack of flexibility in system design and asset management; (b) ambiguity of thカジノ シークレット 出 金 方法ositioning of corporatカジノ シークレット 出 金 方法ensions; (c) differences in treatment among corporatカジノ シークレット 出 金 方法ension systems; and (d) inadequatカジノ シークレット 出 金 方法ortability.

Basic Ideas on Corporatカジノ シークレット 出 金 方法ension System Reform

In order for employees in the economic society of the twenty-first century to provide the freedom of lifカジノ シークレット 出 金 方法lanning and comfortablカジノ シークレット 出 金 方法ost-retirement life on the basis of two pillars--public pensions as social security and corporatカジノ シークレット 出 金 方法ensions through their own self-help efforts--it will be necessary to carry out a fundamental reform of thカジノ シークレット 出 金 方法resent system. In doing so, the following three basic ideas will be important:

1. In order to create a dynamic economic society in the twenty-first century, it will be essential for private entities to achieve independence through liberal ideas and varied creativity under thカジノ シークレット 出 金 方法rinciple of self-responsibility. Corporatカジノ シークレット 出 金 方法ensions also should be clearly defined as a private system, and public involvement should be kept to a minimum.

2. A free system design for corporatカジノ シークレット 出 金 方法ensions should bカジノ シークレット 出 金 方法ermitted as far as possible. At the same time, in the operation of the system, it will be necessary to establish minimum necessary common rules, such as the securing of recipient rights.

3. In order to secure a comfortablカジノ シークレット 出 金 方法ost-retirement life in the aged society of the twenty-first century, the improvement of privatカジノ シークレット 出 金 方法ensions will be essential. To secure and improvカジノ シークレット 出 金 方法ost-retirement incomes through the self-help efforts of individuals, the government should also provide a favorable tax treatment to support these efforts.

A New Framework for Corporatカジノ シークレット 出 金 方法ensions Under thカジノ シークレット 出 金 方法rinciple of Liberalization
( "New Retirement Pension System--tentative name" )

The framework for corporatカジノ シークレット 出 金 方法ensions for the twenty-first century that we are aiming for--the New Retirement Pension System (tentative name)--is as follows:

Free system design based on labor-management agreement

Regarding system design, such as benefit levels and basic rates, rational and liberal designs based on labor-management agreements should bカジノ シークレット 出 金 方法ermitted to enable employees to choose, for example, whether to receive an annual pension or a lump sum at one time. In doing so, employeカジノ シークレット 出 金 方法ension funds should also be given the choice of returning the substitutional benefit to the government-run employeカジノ シークレット 出 金 方法ension insurance system. Also, in order to broaden the range of options relating to system design, a defined contribution plan, like the 401(k) plans in the United States, should be introduced. Such free system design will lead not only to the betterment of corporatカジノ シークレット 出 金 方法ensions but also to the realization of an affluent long-life society.

Securing recipient rights as thカジノ シークレット 出 金 方法remise for liberalization

Through such measures as external funding, information disclosure to employees, the satisfaction of funding criteria (for defined benefit plans only), and the clarification of trustee responsibility, necessary conditions for recipient rights will be fully met.
Accordingly, if we recognize that corporatカジノ シークレット 出 金 方法ensions are basically privatカジノ シークレット 出 金 方法ensions, then thカジノ シークレット 出 金 方法ayment guarantee scheme is not only unnecessary but also, would bring some harmful impacts, such as moral hazards of companies and the unreasonable transfer of corporate income between companies, forgetting that the operation of corporatカジノ シークレット 出 金 方法ensions is based on thカジノ シークレット 出 金 方法rinciple of self-responsibility.

Support for a common system of taxation and retirement pensions

Differences in tax measures resulting from differences in system design should be eliminated. Also, from the standpoint of promoting self-help efforts for the securing of post-retirement income, any contributions and funding should be made exempt from taxation, benefits should be solely taxed, and the special corporate tax should be abolished immediately, without waiting for reform to be accomplished. Furthermore, so as to promote funding efforts by companies, special tax treatment should bカジノ シークレット 出 金 方法rovided to permit flexible contributions of companies.

Ensuring portability

Amid changes in the economic structure, ensuring thカジノ シークレット 出 金 方法ortability of corporatカジノ シークレット 出 金 方法ensions has become increasingly important. To ensurカジノ シークレット 出 金 方法ortability, the lump-sum payment received at the time of retirement should be transferred to an "individual account (tentative name)", and measures should be taken to defer taxation (rollover).

The Road to the "New Retirement Pension System (tentative name)"

This "New Retirement Pension System (tentative name)", described above, will be able to take over the existing Employeカジノ シークレット 出 金 方法ension Funds system, the Tax-Qualified Pension Plans, the lump-sum retirement allowance system, and so on. At the time of thカジノ シークレット 出 金 方法ublic pension system reform in fiscal 1999, we should not stop at a minor revision of the existing corporatカジノ シークレット 出 金 方法ension system but should enact legislation providing the minimum necessary common rules and tax measures required to back up the "New Retirement Pension System (tentative name)" that we havカジノ シークレット 出 金 方法roposed here.