LDP team proposes pension-based sovereign wealth fund worth Y10 tril

Friday 04th July, 05:37 AM JST

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9 Comments

Scrote at 08:05 AM JST - 4th July

I thought that pensions were unfunded here, i.e. there isn't a Y150 trillion pot of cash sitting around waiting to be spent. The government has already spent/wasted it.

A better idea would be for the government to rebate part of the pension payments and let individuals decide how to invest the money. I'm sure I could get a better return than some dodgy government outfit filled with old boys keen to invest in spa resorts built by their mates.
some14some at 08:16 AM JST - 4th July

The team also said the entity should disband in five years if it fails to produce expected results

Expecting +3.2% return whereas at present it is minus 1.64 (source NHK), so in order not to get disappointed after waiting for five years, write it off... Y10tril gone :(
Betting at 10:44 AM JST - 4th July

"The team also said the entity should disband in five years if it fails to produce expected results".

And what would happen to the money if the entity disbanded? Wouldn't many people want to know the answer to this question?
wilbur at 12:13 PM JST - 4th July

yeah good idea to give the LDP more money..there's not a more trustworthy bunch of guys anywhere
Altria at 01:45 PM JST - 4th July

Give the money to somewhere like Goldman Sachs who actually know what to do with it.
Shumatsu_Samurai at 06:53 PM JST - 5th July

yeah good idea to give the LDP more money..there's not a more trustworthy bunch of guys anywhere

Read the article.

"The group, led by former financial services minister Yuji Yamamoto, presented a blueprint for the Japanese SWF and maintained that professional asset managers should be hired by the fund, which would be a government-owned company."
seiosig at 08:05 PM JST - 6th July

Read the article.

"The group, led by former financial services minister Yuji Yamamoto, presented a blueprint for the Japanese SWF and maintained that professional asset managers should be hired by the fund, which would be a government-owned company."

This being a government-owned enterprise, selection of fund management will be based upon the intuition of bureaucrats who understand government but know nothing about personal finance, corporate finance, or investing, and therefore won't know how to select managers. Also, please remember that the big returns on most investments are long term; however, the pension fund needs to make payments every year. Would you put your short-term cash savings / emergency fund into the stock market?

So basically, the LDP has the following options: 1) Raise taxes to increase the pension fund - huge political risk. 2) Cut spending elsewhere to increase the pension fund - huge political risk. 3) Pension fund rebates so citizens manage their own pensions - huge political risk plus a huge shift of responsibility onto the citizens. 4) Buy a lottery ticket. If the market falls, that's okay - the current crop of "professional fund managers" will be off to greener pastures by then.

The U.S. Pension Benefit Guaranty Corporation recently faced the same options and made the same idiotic, criminally irresponsible choice. It's incredibly frustrating to watch Harvard-trained MBA graduates crash the economy while drifting to safety via golden parachutes.
nisegaijin at 10:04 AM JST - 7th July

Give the money to somewhere like Goldman Sachs who actually know what to do with it.

You kidding, right? They are next on the list to go belly up.