Japan Times happened to have an article about the kind of retirement program that was at the heart of Japan’s AIJ scandal. I meant to say something about this, because a few people have mentioned AIJ Investment Advisors to me as a reason not to be in “kosei nenkin”.
Well, what’s happening is that people are confused between a government-based, employer pension program called “kosei nenkin”, and an optional one that some companies participate in called “kosei nenkin kikin“. These are two different things.
The one is included in Shakai Hoken (Social Insurance), and is providing a benefit secured by the Japanese government. The “kikin” plan is investing the money in private investments, and then expecting to generate a certain return.
If you are looking for a guarantee, then obviously, the government-backed program comes closer to it than if you are in one that bets on the market, so to speak.
Having worked for a software company, I actually have a (very small) policy in a kikin plan, in addition to the government backed nenkins (kokumin nenkin and kosei nenkin). There were about two month’s contributions that were diverted into the kikin, so I’m not sure it’s anything I should lose sleep over.