Bank of Tokyo-Mitsubishi will cut its employee pension benefits by up to 20 percent in an effort to reduce costs and bolster its financial position, a bank spokesman said Wednesday.
The cuts, which range between 7 percent and 20 percent, will be implemented April 1, the spokesman said, and nearly half the firm's employees will be subject to the maximum reduction.
The move follows a cut in the guaranteed annual benefit rate to 4.5 percent from 5.5 percent, the spokesman said.
This reduction was carried out because investment yields on pension funds have averaged just 3 percent over the past decade.
The bank's decision is expected to lower its annual personnel costs by 2.3 billion yen and shrink its pension obligations by 30 billion yen to 150 billion yen, the spokesman said.
Bank of Tokyo-Mitsubishi, which is the core bank within the Mitsubishi Tokyo Financial Group Inc., will become the first major commercial bank in Japan to cut its employee pension benefits.
The move may be followed by other banks needing to restructure their operations.
Several large nonfinancial companies, including Toyota Motor Corp. and Matsushita Electric Industrial Co., have cut their pension benefits.
Big banks have refrained from doing so until now, limiting their cost-cutting efforts to paring salaries and bonuses.