Survey: Boost in Japan Corp Pension Funds

Buoyed by gains in global and domestic shares, returns of corporate pension funds in Japan jumped in 2009/10.

(April 6, 2010) — For the first time in three years, corporate pension funds in Japan posted a positive return in the January-March quarter, a preliminary survey by Towers Watson showed.

Following a record loss the previous year due to the financial crisis, the survey revealed that the rate of return on the pension funds increased to 13.8% in the financial year to March. The rate of return increased to plus 2.4% during January-March from plus 2.2%, Reuters reported.

Towers Watson, which was formed through the merger of Watson Wyatt Worldwide Inc and Towers Perrin Forster & Crosby in January, surveys about 120 corporate pension funds on a quarterly basis.

In other news, Japan’s public pension fund, the world’s largest, will continue keeping most of its assets in domestic bonds, a decision in line with the Health Ministry’s call for the fund to keep investing in safe assets. According to Bloomberg, the $1.3 trillion Government Pension Investment Fund (GPIF), which reviews its asset allocation model every five years, will invest 67% in domestic bonds and 11% in domestic stocks. The fund will allocate 9% to overseas stocks, 8% to overseas bonds and 5% to short-term assets.

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