Prime Minister Shinzo Abe suggested Monday that pension benefit payments could be reduced if investment losses grow at the Government Pension Investment Fund.
“Payments will naturally be affected if the expected profits are not generated,” Abe said at a House of Representatives Budget Committee meeting. “If the situation does not allow benefit payments, payments will need to be adjusted.”
Abe was replying to a question from Yuichiro Tamaki of the Democratic Party of Japan, the main opposition force, on recent stock price plunges.
Abe also stressed that temporary gains and losses are not reflected immediately in the amount of pension benefit payments, as the GPIF’s asset management performance is evaluated on a long-term basis.
On the yen’s recent upsurge, Abe said rapid market movements are “undesirable.”
“I want the finance minister to continue watching the movements closely and to respond if needed,” he said.
Abe attributed the contraction of the Japanese economy in October-December 2015 primarily to unusually warm weather that weighed down consumer spending.
Noting that gross domestic product grew 2.5 percent on a nominal basis in 2015, Abe said, “Japan’s economic fundamentals are sound and I don’t think the situation has changed.”
In the final quarter of 2015, Japan’s seasonally adjusted GDP fell at an annualized rate of 1.4 percent in price-adjusted real terms after a rebound in the previous three months, according to government data released Monday.