Success of Government Growth Strategy Holds Key to Sustainability of Japan's Public Pension System -- Implications from 2014 Actuarial Valuation Results

Abstract

The actuarial valuation report of the Japanese public pension system was released in June 2014. It showed that the success of the government growth strategy holds key to the public pension system’s sustainability. Also, the assumption for the expected return on the public pension reserve fund indicated that its management organization, GPIF, needs to continue the enhancement of its investment management. In any event, the role of the public pension benefit will be reduced due to the aging population. Private pension plans such as defined contribution plans will take on greater importance. Measures to strengthen them included in the Abe government’s second growth strategy should be realized.

Keywords: public pension, GPIF, defined contribution plan, Japan

JEL Classification: G23, G28, H55