JAL bankruptcy may prompt Japan Inc to shore up pensions

TOKYO: Japan Airlines Corp's $25.5 billion bankruptcy may be the impetus for companies including Hitachi Ltd and Toyota Motor Corp, Japan's biggest private employers, to shore up their deficit-ridden pension plans.

Japan's top 278 companies were a combined 21.5 trillion yen ($235.7 billion) behind on their pension funding in fiscal 2009, a 50 percent increase from the previous year, according to the Daiwa Institute of Research in Tokyo. Hitachi's unfunded liabilities totaled 1.1 trillion yen - triple the deficit that helped push Japan's former national carrier into bankruptcy.

The pension plans suffer from two decades of slumping markets, an aging population and a dependence on packages immune to investment performance. Japan's firms stuck with defined-benefit plans even as the stock market slid and interest rates hovered near zero.