Abe to take aim at GPIF with expanded oversight panel -sources

TOKYO Sun May 18, 2014 9:37pm EDT

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TOKYO May 19 (Reuters) - Japan is moving to shake up oversight of the world's largest public pension fund to give it a more professional and expanded board and reduce its reliance on government bonds as part of a set of economic reforms to be announced next month by Prime Minister Shinzo Abe's government, according to two people with direct knowledge of the discussions.

As part of Abe's revised growth strategy, officials are considering a proposal that would add two or three full-time members to the investment committee that oversees the $1.26 trillion Government Pension Investment Fund (GPIF), the people said. At the same time, the committee could be given new, broader powers that would make it the final arbiter for asset allocation decisions.

That would give the fund more of the in-house investment expertise the government has concluded it needs to move towards riskier investments like stocks and away from low-yielding Japanese government bonds, according to the people, who asked not to be named because the policy measures remain under discussion.

At the same time, GPIF's investment committee has formed a four-member working group headed by Sadahiro Horie, senior researcher at Nomura Research Institute, that has been tasked with a review of its allocation targets over the next two to three months, a person with knowledge of the process said. (Editing By Kevin Krolicki and Edmund Klamann)

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