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Japan to delay 401(k) pension scheme to 2001-media

TOKYO: Japan's government plans to delay introducing a defined-contribution 401(k)-type pension scheme by several months until early next year, local media said on Monday.

The welfare, labour, finance and trade ministries have agreed to introduce the scheme in the first quarter of 2001, rather than the initially expected autumn 2000, to allow more time to ready computer systems and make other preparations, the Nihon Keizai Shimbun and Jiji news agency reported.

Employers and financial institutions have been rushing to prepare for the pensions-plans modelled after 401(k) pensions in the United States which specify the amount of premiums paid into the scheme, rather than defining the amount of future benefit to policyholders. Competition on developing 401(k)-type plans is expected to heat up between two key groups one joining the Industrial Bank of Japan Ltd and giant stockbroker Nomura Securities Co Ltd, and the other comprising Bank of Tokyo-Mitsubishi (BTM) Ltd and Sumitomo Bank.

On Monday, Nippon Life Insurance Co, Japan's biggest life insurer, said it was in talks on joining the BTM-Sumitomo venture.

Sanwa Bank Ltd, Toyo Trust & Banking Co Ltd and Daido Life Insurance Co announced last year they were forming a similar pension joint venture. The press reports said the delay was also meant to allow more time for changes in Japan's administrative system, including the January 2001 merging of the Ministry of Labour with the Health and Welfare Ministry as part of a sweeping overhaul of the central government bureaucracy.

The government must specify an introduction date for the schemes, left murky thus far, when it introduces legislation for the 401(k)-type system to parliament in a session starting on Thursday.-Reuters