TOKYO -- Pasona Inc. will be the first company in Japan to set up a 401(k)-like plan.
In September, Japan's largest temporary staff agency will institute a defined contribution pension program for its 2,500 employees and 280,000 registered temps, the company announced July 22. Although the plan will start soon, participants will not enjoy tax relief on contributions to their accounts until the government approves this form of pension scheme, likely early next year.
Pasona has enlisted AIMIC Investment Management Ltd. and Alico Japan, a member of the AIG insurance group, to provide investment management.
Alico Japan will offer only an insurance product that will be a key element in the program.
Participants will contribute 10,000, 20,000 or 30,000 yen (between $85 and $255) per month to their accounts, and Pasona will match a yet-undisclosed percentage of their contributions. Those opting for 10,000 or 20,000 yen contributions will see 50% of their money go to the insurance product; for contributors of 30,000 yen per month, 10,000 will go to the insurer.
Participants also will have access to four AIMIC funds, although more options may be added later, said Kevin Adams of Pasona's public relations department. The four are: AIMIC World Equities Open; AIMIC World Balanced Open; AIMIC World Bond Open; and AIMIC Japan Equities Open.
In addition to providing employees and temps with a portable, Pasona aims to build up a pool of expertise in the area of defined contribution programs, he said.
"Eventually, we intend to offer outsourcing and educational services for companies seeking the know-how to start their own plans, and for financial firms developing 401(k)-style programs who need knowledgeable staff to assist them. This type of pension program is going to be needed as Japan's labor market becomes more and more fluid, and participants will have to be taught investment savvy so they can take their retirement planning into their own hands," he said.