The health and welfare ministry in November 2012 came up with a plan to phase out over 10 years the corporate pension funds known as kosei nenkin kikin. The proposal, which in essence meant the eventual abolition of all kosei nenkin kikin funds, followed AIJ Investment Advisor Co.'s reported loss earlier in 2012 of most of the ¥145.8 billion in pension assets under its management as a result of bad investments. But the ministry has changed its plan in the face of LDP opposition. As a result, some kosei nenkin kikin funds will continue operating.
Kosei nenkin kikin funds manage private corporate pension assets as well as part of the pension premiums that originally must be paid into the nation's kosei nenkin pension program, which is a pension plan for corporate workers. Under the new plan, a situation could develop in which workers and companies that participate in the kosei nenkin pension program but not in kosei nenkin kikin funds, must shoulder losses from poorly performing kosei nenkin kikin funds even though they did not participate in those programs.
Therefore, the ministry should stick to its original plan to abolish all kosei nenkin kikin funds.