Managing Public Pension Reserve Funds: The Case of The Government Pension Investment Fund (GPIF) of Japan

Abstract

Japan’s Government Pension Investment Fund (GPIF) has US$1.4 trillion in assets and is the world’s largest pension fund. The institutional structure and the investment style of GPIF differ from those of other Public Pension Reserve Funds (PPRF). This article describes how GPIF is structured and how it works, then compares it with Canadian and American PPRF approaches. Perspectives include the discretion exercised in investment decisions, information asymmetry, and accompanying agency and governance problems.

Keywords: Agency Costs, Information Asymmetry, Institutional Structure, Investment Costs, Pension Fund, Public Pension Reserve Funds