In addition, Japanese economy has been experiencing a near-zero interest rate for some time. Two types of defined-contribution pensions will be introduced. One is a firm-based type offered by firms to its employees. Premium is paid by employer. Premium is paid by subscribers themselves.
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.