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Deliberations on controversial pension reform bills finally resumed at a Lower House welfare committee Wednesday as the opposition parties sharply criticized a government plan to transfer the management of pension assets worth 140 trillion yen from the Finance Ministry to the Health Ministry. The package of bills, which would gradually reduce the future benefits paid by the public pension system, also includes one allowing the Health and Welfare Ministry to manage the pension assets as part of the Finance Ministry’s reforms of the “zaito” fiscal investment budget, starting as early as fiscal 2001. The opposition parties argued that Health Ministry bureaucrats are not qualified to manage such huge amounts of money, and that the pension assets would make the ministry one of the biggest institutional investors in the world. Naoto Kan, policy chief of the Democratic Party of Japan, claimed that the ministry is trying to ram the bill through the committee simply to expand its power. He pointed out that one corporation affiliated with the ministry that was entrusted with managing a 25.73 trillion yen portion of the 140 trillion yen in pension assets had posted more than 1.2 trillion yen in accumulated debts as of March. “How can you assure us that the Health and Welfare Ministry can do better with the 140 trillion yen after its own corporation created debts of more than 1 trillion?yen ” Kan asked the committee. Health and Welfare Minister Yuya Niwa argued that current economic conditions forced the corporation into debt, and that the ministry will be more cautious in managing the pension funds by learning lessons from the failure. Incidentally, the pension reform package also includes a bill to liquidate the corporation, known as “Nenpuku,” or the Pension Welfare Service Public Corp. The corporation’s debts will be paid back over a period of more than 10 years, possibly with premiums from the pension insurance system if stock prices remain low during the period.

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