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TOKYO - Better early than late: Yasuda Kasai CIGNA Securities Co. is the first company in Japan to set up a prototype payroll deduction 401(k)-type plan.
Human resources personnel are testing the plan using their own money.
But competitors are not racing in to copy the model plan developed by the joint venture between CIGNA Global Holdings Ltd., Hartford, Conn., and Yasuda Fire and Marine Insurance Co. Ltd.
Rather, other money managers, such as Nippon Life Insurance Co., Osaka, are awaiting the outcome of a major overhaul of the Japanese tax system.
"It would not be 'too late' to offer DC-style investment products after the overall structure of tax system reforms becomes clearer," said Kiyoaki Fujiwara of the economic policy bureau of the Federation of Economic Organizations.
Under the proposed reforms, the ministries of Health and Welfare, Labor, and International Trade and Industry seek no taxation on contributions and investment returns, and a favorable rate charged on distributions.
But Ministry of Finance officials oppose tax breaks on benefits, instead insisting standard incometax rates apply.
Even then, proposed annual caps on tax-deductible contributions were viewed as too modest by the American...