880,000 pensions hit by Japan investment scandal

A growing scandal around an investment company that has lost $2.3 billion has affected pensions for up to 880,000 people, Japan's government said Tuesday. AIJ Investment Advisors has reportedly been lying to clients for years, boasting of annual returns of up to 240 percent while in fact 185 billion yen in pension investments has melted away. The company's operations were suspended last week and the government ordered a probe of 260 asset management firms nationwide after allegations that most of the money in its care had disappeared. The scandal has shocked Japan, where a rapidly ageing middle class population is increasingly looking to private pension funds, while the state retirement pot also struggles due to gross mismanagement of its own, according to AFP. The government said Tuesday that the 185 billion yen was from 84 separate pension funds, and affected 540,000 employees who were saving for retirement, as well as more than 340,000 people already drawing their pensions.

"A growing scandal around an investment company that has lost $2.3 billion has affected pensions for up to 880,000 people, Japan's government said Tuesday"Most of the 84 funds entrusted fractions of their savings to AIJ, but 13 funds had a quarter of their investments exposed to AIJ, the health ministry said. The company, which was set up in 1989, has consistently reported healthy returns on investments since the start of the last decade, but financial regulators now say the bulk of the money it looked after is gone