World’s Largest Pension Continues Governance Changes, Adds Investment Board

Japan’s Government Pension Investment Fund, the largest pension fund in the world, released plans this week to create a mostly-independent board to oversee investments.

The plan is part of a years-long overhaul of the fund’s portfolio and governance.

Details from Bloomberg:

The $1.1 trillion Government Pension Investment Fund will establish a 10-person committee consisting of nine outsiders and GPIF’s president, the ministry said in a proposal Friday in Tokyo. The new body will be responsible for decision-making and supervising how the pension fund invests its assets, the health ministry said. The aim is to submit a bill to the ordinary session of Japan’s Diet, which usually starts in January.

[…]

“It’s good that change is happening after all these discussions,” Hiroaki Hiwada, a Tokyo-based strategist at Toyo Securities Co., said by phone. “The revamp of the governance structure is in tune with the times.”

The management committee will have one representative of labor, one from the business world and at least one full-time member, according to the ministry’s proposal. They will have five-year terms. GPIF’s chief investment officer, currently Hiromichi Mizuno, can attend meetings but will not be on the committee, according to the plan.

GPIF manages $1.1 trillion in assets.

Photo by Ville Miettinen via Flickr CC License