ZURICH — Noboru Terada, former executive investment officer of Japan's Government Pension Investment Fund, the world's largest pension fund, ripped into the fund's new governance structure during a speech at the CFA Institute's annual meeting in Zurich.
Mr. Terada, who retired March 31, said the roughly ¥150 trillion ($1.34 trillion) pension fund is essentially a puppet of Japan's Ministry of Health, Labor and Welfare.
The broadside represents a startling attack on the Japanese government, where consensus is highly valued.
Mr. Terada is no stranger to controversy: Earlier this year, he lambasted a government proposal that would have forced the pension fund to account for domestic bonds at book value instead of market value. That proposal would have masked an expected decline in value as the Japanese central bank starts increasing interest rates from their effective rate of zero.
With the help of newspaper reports and pressure from the American Chamber of Commerce, Mr. Terada defeated this proposal at the 11th hour.
Now, he is tackling an unresponsive governance structure put in place with the April 1 reorganization of the public fund.
Mr. Terada alleged that under the new structure, Jiro Kamasaki, minister of Health, Labor and Welfare, is pulling all of the strings at the Government Pension Investment Fund.
E-mails requesting comment from ministry officials were not returned.