The Japan Association of Corporate Executives called Tuesday for the early introduction of 401(k)-style pension plans and employee stock ownership plans to help bolster falling stock prices.
Widely practiced in the United States, 401(k) plans are defined-contribution pension schemes whose benefits are tied to the performance of investments. The plans allow employees to defer part of their gross income and invest it in stocks, bonds or money market funds.
ESOPs, also popular with U.S. companies, encourage employees to invest in the employer's stock. Under the program, employees can participate in the management of a company.
While the proposal by the influential group of business leaders is aimed at stimulating stock trading, the Federation of Economic Organization, a powerful business lobby, is seeking the same effect through the creation of a treasury stock system deregulating companies' buyback of their own shares.
Currently, companies are only allowed to carry out such repurchases for special purposes, such as liquidating a portion of outstanding shares or providing stock option schemes.