February 10 & 16, 2016
Prime Minister Abe Shinzo has made clear his recognition that losses from investments of pension funds in stocks could bring about cuts in pension benefits provided by the government to pensioners.
This means that pension premium payers may pay for the loss of about eight trillion yen the Government Pension Investment Fund (GPIF) posted in its domestic/foreign stock holdings.
At a House of Representatives Budget Committee session held on February 15, Abe said, “Government payments of pension benefits will be naturally affected if the GPIF’s stock trading does not generate a profit as expected,” adding, “There is no option but to adjust pension benefits payments.”
The Abe administration in October 2014 drastically increased the volume of the GPIF’s “risk assets” as a growth strategy by asserting that it “will contribute to investments leading to growth”, and then allowed the world’s largest fund to use 87 trillion yen of its 130 trillion yen in assets for equity investments.
As a result, directly hit by the decrease in stock prices, the GPIF had a loss of 7.9 trillion yen in the July-September quarter of 2015. The strategy promoted by Abe to maintain high stock values turned out to be a huge failure.
The Abe regime must be held responsible for the expansion of risky investments. Even now, many pensioners have to live on an already small amount in pension benefits. It is unacceptable for the government to risk public pension reserve funds any further.
Past related article:
> Japan’s public pension fund posts record loss of 8 trillion yen [December 1, 2015]
This means that pension premium payers may pay for the loss of about eight trillion yen the Government Pension Investment Fund (GPIF) posted in its domestic/foreign stock holdings.
At a House of Representatives Budget Committee session held on February 15, Abe said, “Government payments of pension benefits will be naturally affected if the GPIF’s stock trading does not generate a profit as expected,” adding, “There is no option but to adjust pension benefits payments.”
The Abe administration in October 2014 drastically increased the volume of the GPIF’s “risk assets” as a growth strategy by asserting that it “will contribute to investments leading to growth”, and then allowed the world’s largest fund to use 87 trillion yen of its 130 trillion yen in assets for equity investments.
As a result, directly hit by the decrease in stock prices, the GPIF had a loss of 7.9 trillion yen in the July-September quarter of 2015. The strategy promoted by Abe to maintain high stock values turned out to be a huge failure.
The Abe regime must be held responsible for the expansion of risky investments. Even now, many pensioners have to live on an already small amount in pension benefits. It is unacceptable for the government to risk public pension reserve funds any further.
Past related article:
> Japan’s public pension fund posts record loss of 8 trillion yen [December 1, 2015]
