A Review on the Reform in 2001 of the Investment System and Policy for Japan's Social Security Reserve Fund: Issues and Future

Along the history before 2001,Japan's social security fund managed by central government—the public pension reserves—was invested by an institution named FILP(fund investment and loan plan) which provided loans for industry development and social infrastructure building.This investment policy had resulted in trillions Yen of bad debt losses.However,from April of 2001,the Japanese government started a reform on the investment mechanism of the fund.A newly constituted GPIF(government pension investment fund) replaced FILP and took the responsibility for the investment of the fund.It carries out a marketlized investment strategy in which a large amount of shares were put into the capital market.This article will analyze the reform process from 2001 on the basis of the detailed facts collected by the authors,and for the first time give a comment about the problems and effects in Japan's new pension fund investment system.The paper was looked forward to giving some lessons and indications for China's social security fund reform.