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Finance

GPIF reform advocate seen battling for decentralization of power

TOKYO -- Japanese Welfare Minister Yasuhisa Shiozaki will likely push for decentralizing decision-making at the country's huge public pension fund when he meets with an advisory panel Wednesday.

     But some in the Ministry of Health, Labor and Welfare are adamantly against such drastic reform, and how the fund's organization will end up has yet to be seen.

     Shiozaki will make an unusual move for a welfare minister when he attends a meeting of the Social Security Council's pension subcommittee to request reorganization of the Government Pension Investment Fund. "The GPIF is one of the important reforms under Abenomics, and I'd like to communicate my thinking (to the subcommittee)," he told a news conference Tuesday.

     Under the current framework, the GPIF is headed by Takahiro Mitani, a former Bank of Japan official, who single-handedly makes decisions ranging from portfolio allocation targets to which institutions manage the fund's assets. The president's decisions reflect the welfare ministry's views, and therefore the fund is criticized as being subject to government influence. Having a single person in charge also means that a wide range of asset management risks may not be addressed properly.

     Shiozaki wants to change the GPIF's status so that a board of directors can be set up to create a multi-person decision-making process. Under this framework, the welfare ministry would appoint labor and management representatives and financial experts to the board, subject to approval by the Diet. This organization, similar to that of the policy board of the central bank, would have more autonomy from the welfare ministry and other government agencies.

(Nikkei)

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