November 2018
It is very encouraging that, as of November 15, the Mitsubishi Corporation Pension Fund newly declared its adoption of the Stewardship Code. (See “Institutions that newly declared adoption” for reference.) Along with pension funds that had already declared adoption—SECOM, Panasonic, NTT, and Eisai—this brings the total to five pension funds of non-financial companies adopting the Code. SECOM had declared from the outset, but the other pension funds did so after I submitted a proposal to the Prime Minister and the Minister of Health, Labour and Welfare—the supervisory authority over corporate pension funds—requesting regulatory changes to promote adoption of the Stewardship Code by corporate pension funds. This led to the creation of a “Stewardship Working Group,” which brought together the Ministry of Health, Labour and Welfare, the Corporate Pension Fund Association, experts, and Financial Services Agency observers, after which these funds declared adoption.
The adoption of the Code by these corporate pension funds represents significant progress for Japan, and the companies involved deserve praise. Although Japanese companies often say they value their employees, they have historically paid little attention to employees’ post-retirement financial resources. Corporate pension funds without government guarantees—in cases such as Japan Airlines—have forced employees to agree to substantial reductions in pension benefits when a company faces insolvency, and if contributions fall short at the time of bankruptcy, the outcome is often treated as unavoidable. This is why, as I proposed to the Ministry of Health, Labour and Welfare in 2016, strengthening pension governance is essential.
Source: Pension Fund Association, Stewardship Reports

Nicholas Benes

The opinions and views expressed in this submission are solely those of the author and do not represent those of his/her institution or organization.