Japan Press Weekly

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2016 June 29 - July 5 TOP3 [ECONOMY]

Abe’s policy to have public pension fund buy more stocks causes huge loss

It has come to light that the Government Pension Investment Fund (GPIF), Japan’s national pension fund, posted a loss of more than five trillion yen in FY2015. Prime Minister Abe Shinzo should be blamed for causing such a huge loss as he had the GPIF increase its stock investment with the aim of boosting the stock market.

PM Abe in May 2014 in London declared that he will use the 130-trillion-yen fund, the world’s largest institutional investor, to create a bull market in stocks. As a result, the GPIF’s target allocation for domestic and foreign stocks was increased by 20 trillion yen.

The public pension fund consists of premiums paid by the general public and thus should be managed in a safe and low risk manner. If the GPIF keeps losing money due to losses in high risk stock trading, this will lead to higher premiums and reduced pension benefits. Even the U.S. government in its public pension fund management avoids buying stocks.

It is impermissible for the Abe government to put public pension funds at risk just to maintain his “Abenomics” economic policy while imposing heavier financial burdens and cuts in pension benefits on the general public on the pretext of a tight pension budget.


Past related articles:
> Abe hints at cutting pension benefits due to stock market downturn [February 10 & 16, 2016]
> Japan’s public pension fund posts record loss of 8 trillion yen [December 1, 2015]