OSAKA -- Matsushita Electric Industrial Co. is seeking to change its near-uniform retirement allowance system and generous high-yield company pension program, Matsushita sources said Saturday.

Instead, the consumer electronics giant wants a program that more accurately reflects individual employee contributions to the company and the prolonged low-interest rate market environment.

Matsushita has already given a draft proposal of the new plans to its labor union, with the goal of reaching an agreement by the end of this year to allow the plans to be introduced in the business year beginning next April, the sources said.

The change is apparently being sought in part to reduce the high cost of the existing programs, which were established when company growth was extremely strong amid Japan's rapidly expanding economy of the past.

Matsushita is known for its generous employee-benefits program that has long been viewed by other companies as a model to emulate. This move means the company could now have the opposite influence on employers struggling in the stagnant economy.

Under the current system, Matsushita's retirement allowances are determined largely by salary levels and length of service at retirement, meaning there is little variation among retiring employees.

But after introducing a new merit-based salary system with the 2001 business year, the company now wants to change the retirement allowance system to better reflect each employee's contribution to the company as well as its business performance at the time, the sources said.

Matsushita currently gives retiring employees a choice between receiving a lump-sum allowance or investing in a pension management fund.

The fund consists of two tiers. The first is an employer-subsidy component that is linked to the government-run pension program, and the other is a company-designed program.

Many of Matsushita's retiring employees divide their retirement allowances, putting half into each of the two tiers and allowing the fund to manage the money, according to the sources.

The pension-management program has been very generous, particularly the in-house component, which is offered to employees aged 55 or older and with service length of 15 years or longer.

It guarantees an investment return at an annual 7.5 percent for 20 years after retirement, and this return has so far been virtually perpetual, according to the sources.

But amid the prolonged economic downturn -- with financial authorities' near zero interest-rate policy -- the generous return has become a heavy burden on the company.

Matsushita wants to change the return rate of the in-house pension program to better reflect market interest rates, as well as limiting the length of the provision period, the sources said.

Once these changes are realized, the company wants to introduce a corporate pension plan modeled after U.S.-style 401(k) plans as a new option in the near future, they added.

The 401(k) program is a defined-contribution plan whose benefits hinge on investment performance.