The Introduction of Employee Contributions to Defined Contribution Pension Plans
Nomura Institute of Capital Markets Research
Nomura Journal of Capital Markets, Vol. 3, No. 3, 2012
On 4 August 2011 the Japanese Diet passed an amendment enabling company employees to contribute to corporate defined contribution pension plans. Until then only employers were able to contribute. As a result of the amendment, however, plan participants are able since January 2012 to make their own contributions to their own plan accounts. As this represents a valuable opportunity for plan participants to build up a pension fund (contributions are exempt from tax), employers should consider introducing it as soon as possible. We hope the move will lead plan participants to take a greater interest in defined contribution pension plans and also encourage more companies to introduce them.
Number of Pages in PDF File: 5
Keywords: defined contribution pension plan, employee contribution, Japan
JEL Classification: G23, G28Accepted Paper Series
Date posted: March 28, 2012
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