1. Reasons for Amendment

The Amendment improves operational regulations on retirement pensions to support the more flexible operation of reserves, and tightens provisions on retirement pension trustees, etc. to address unwholesome business practices and enhance financial stability.

2. Major Provisions

A. Streamline conflict of interest regulations for defined contribution plans and individual retirement pension plans (Article 10)

Increase the investment limit in subsidiary securities for individual retirement pension plans and defined contribution plans operated directly by employees but not employers.

B. Increase the limit of investment for defined contribution plans in municipal bonds/special bonds issued by the same person (Article 13)

Increase the investment limit in long term, blue chip assets to support the use of a cash flow matching strategy between retirement benefits and retirement pension reserves.

C. Increase the scope of “products with lowered investment risk” (Article 11)

Add money market funds and overnight sale and repurchase agreements secured by government bonds, monetary stabilization bonds, etc. to the list of “products with lowered investment risk” where up to 100 percent of a retirement pension reserve may be invested. 

D. Introduce guarantee-type performance dividend insurance for individual retirement pension plans (Article 8-3)

Prepare a policy incentive that encourages employees to receive reserve payments in the form of an annuity.