Staff writer A Japanese unit of Citigroup of the United States is ready to tie up with the vast nationwide network of state-run post offices in entering the new pension business. "We stand ready to support them in any way that we can," Gary Jackson, director of defined-contribution plans at the Tokyo-based SSB Citi Asset Management Co., said in an interview. More than 24,000 post offices, operated by the Posts and Telecommunications Ministry, will be allowed to sell financial products designed for the planned pension plans modeled on 401(k) retirement plans in the United States. Jackson said no deal has been made yet, adding "that's a decision that they will have to make." Citibank, the group's retail bank, already has a relationship with post offices that allows its depositors to use postal automatic teller machines. The bank will be one of the "vendors" of investment tools managed by SSB Citi. The planned expansion of the post office's financial services, however, is expected to draw fresh criticism. Its savings and insurance services already have already been criticized as obstacles to commercial banks and insurers. SSB Citi intends to provide both of the two types of pension plans -- corporate and individual types -- to be allowed under the government scheme, Jackson said. This scheme for defined-contribution plans is scheduled to start as early as January 2001. In the corporate type, companies will have tax advantages for their contributions to their workers' plans. Employed workers in a limited category and the self-employed can join the individual type, in which they can make tax-exempt contributions. In both types, individual participants will choose investment options. Benefits depend on the results of investments, unlike conventional defined-benefit plans, which are fixed. Jackson said his asset management firm will tie up with two Japanese record-keeping companies -- Japan Investor Solutions & Technologies Co. and Nippon Record Keeping System Co. The record keeping firms will keep track of data on individual accounts in pension plans. But if these firms want to learn from Citigroup, it is willing to share its knowhow in the U.S. 401(k) business, he said. SSB Citi in Japan was born in October when Tokyo units of Salomon Brothers Asset Management and Smith Barney Asset Management, both of which are members of Citigroup, were combined. Jackson said the defined-contribution pension business is not very lucrative because costs are high and profit margins slim. Yet he said, "strategically we must be in the defined-contribution business here" because Japan, the world's second largest economy, is important to the financial group's total business. The enormous amount of assets expected to be pooled in the new pension plans is also attractive, he indicated. "We do not expect to be a dominant player in this marketplace, but we do expect to be a meaningful player," he said. The planned tax incentives for the new pensions are smaller than expected, and it was an "unfortunate decision" by the government, he said. But he expressed overall optimism for his pension business, saying the first few years of new pensions will not make much difference in the long run. "I think defined-contribution plans 10 years from now would be a roaring success in Japan."