Japanese public pensions enjoyed record returns in 2013
TOKYO -- Public pension programs in Japan earned an all-time high investment return totaling about 18 trillion yen ($170 billion) last year, double the amount from the previous year, thanks to soaring stocks and a weaker yen.
The Government Pension Investment Fund handles investment of the roughly 120 trillion yen in total reserves for the national and employee pension programs. The investment yield for 2013 is believed to have hit a record 18%.
Higher returns do not affect contributions or benefits immediately. But stronger finances for pension funds means that pensioners can expect stable benefit payments in the future.
An increase in benefits due to a graying population has forced public pensions to tap 3 trillion yen to 6 trillion yen from reserves every year since fiscal 2009. Investment returns in 2013 were apparently large enough to cover four years' worth of reserve tapping.
If market conditions remain solid during the final January-March quarter of fiscal 2013, then investment yields will likely reach double digits for two straight fiscal years for the first time ever. The return was 10.23% for fiscal 2012.