Subscribers have individual account and can choose from a variety of investment choices. Schemes must offer a minimum of three investment choices. The benefits can be either pension of lump-sum, and can be offered after the age 60. Withdrawal of funds before age 60 is not allowed, and minimum of 10 years of participation is necessary to receive benefits. Premiums can be deducted from income for tax purposes.
Benefits are tax-exempt up to some amount.
It is said that some firms are not eager to introduce a defined-contribution scheme, considering strong opposition from labour unions. Also, financial companies may be reluctant to offer such scheme because of the small market and profitability. People might have additional safety-net for their future. It might facilitate an influx of private money into stock market which might revive the economy. Japanese public is not as familiar with investment in stock market, so forth, as the American public as in the case of 401K, that more time and education is necessary.