Defined Contribution Pension Act

In light of the changes in socioeconomic situations such as the progression of the declining birthrate and aging population and the diversification of lifestyles in old age, and in order to enable individuals to give instructions on their own responsibility regarding investment of funds contributed by individuals or employers and receive benefits based on the investment outcomes in old age, this Act aims to provide for necessary particulars concerning defined contribution pensions and support the voluntary efforts of citizens for securing income in old age, thereby contributing to stabilizing the lives and improving the welfare of citizens, in conjunction with provision of benefits of public pensions.

The term "defined contribution pension plan" as used in this Act means a corporate-type pension plan and an individual-type pension plan.

The term "corporate-type pension plan" as used in this Act means a pension system independently or jointly implemented by an employer with a place of business where an employees' pension insurance (EPI) is applicable based on the provisions of the following Chapter.

The term "individual-type pension plan" as used in this Act means a pension system implemented by the Association based on the provisions of Chapter III.

The term "EPI-applicable place of business" as used in this Act means an applicable place of business referred to in Article 6, paragraph (1) of the Employees' Pension Insurance Act (Act No. 115 of 1954) and an applicable place of business for which the approval referred to in paragraph (3) of that Article has been obtained.

The term "Association" as used in this Act means the National Pension Fund Association, which has been designated by the Minister of Health, Labour and Welfare as the sole person throughout Japan to implement an individual-type pension plan.

The term "category I or IV EPI insured" as used in this Act means an insured person covered by the employees' pension insurance who is a category I EPI insured person prescribed in Article 2-5, paragraph (1), item (i) of the Employees' Pension Insurance Act (hereinafter referred to as a "category I EPI insured person") or a category IV EPI insured person prescribed in item (iv) of that paragraph (hereinafter referred to as a "category IV EPI insured person").

The term "defined contribution pension plan operational management business" as used in this Act means a business of providing all or part of the following services (hereinafter referred to as the "operational management services"):

the services set forth in (a) through (c) below for defined contribution pension plans (excluding the services specified by Order of the Ministry of Health, Labour and Welfare, such as services relating to confirming the eligibility as a participant of an individual-type pension plans, by the Association; hereinafter referred to as "records-related services"):

recording, keeping, and giving notice of particulars concerning a participant of a corporate-type pension plan and an instructor of a corporate-type pension plan investment as well as a participant of an individual-type pension plan and an instructor of an individual-type pension plan investment (hereinafter collectively referred to as "participants or instructors"), such as their names, addresses, and the amount of assets managed per individual;

assembling the instructions on investment given by the participants or instructors and giving notice of the contents thereof to the asset management institution (meaning the party with whom the employer implementing the corporate-type pension plan had concluded a contract pursuant to the provisions of Article 8, paragraph (1); the same applies hereinafter) or to the Association;

issuing a ruling on the right to receive benefits; and

selecting the investment method of the defined contribution pension plan and presenting it to the participants or instructors as well as providing information relating to that investment method (hereinafter referred to as "investment-related services").

The term "participant of a corporate-type pension plan" as used in this Act means a person, under a corporate-type pension plan, for whom an employer with an EPI-applicable place of business that implements the corporate-type pension plan for that person makes contributions, and who gives instructions on investment with regard to the person's assets managed per individual.

The term "instructor of a corporate-type pension plan" as used in this Act means a person, under a corporate-type pension plan, who gives instructions on investment with regard to the person's assets managed per individual (excluding a participant of a corporate-type pension plan).

The term "participant of an individual-type pension plan" as used in this Act means a person, under an individual-type pension plan, who makes contributions and who gives instructions on investment with regard to the person's assets managed per individual.

The term "instructor of an individual-type pension plan investment" as used in this Act means a person, under an individual-type pension plan, who gives instructions on investment with regard to the person's assets managed per individual (excluding a participant of an individual-type pension plan).

The term "assets managed per individual" as used in this Act means assets reserved under a corporate-type pension plan or an individual-type pension plan to be allocated to benefits to be paid to a person who is or was a participant of a corporate-type pension plan or to a person who is or was a participant of an individual-type pension plan.

The term "the amount of assets managed per individual" as used in this Act means the amount calculated pursuant to the provisions of Cabinet Order as the amount of assets managed per individual.