Correspondence: Sarah McLellan, c/o Yumiko Nakayama, Morgan Stanley Japan Securities Co., Ltd., Yebisu Garden Place Tower 5F, 4-20-3 Ebisu, Shibuya-ku, Tokyo, 650-6008, Japan. Tel.: 415 576 2394; Fax: 415 591 4541; E-mail: sarah.mclellan@morganstanley.com

¹is Senior Vice President in the Enterprise Valuation Group for Lehman Brothers', Fixed Income Department. His responsibilities include developing quantitative valuation models to aid investment decisions of clients. Previously, he worked for more than eight years at Morgan Stanley where he was responsible for advising clients on accounting and regulatory issues as well as various products which helped clients understand the interaction between enterprise risk, capital employed, financial leverage and intrinsic value. Prior to Morgan Stanley, his experience in financial services included associate analysts positions at BancBoston Robertson Stephens and the Fir Tree Value Fund. He also worked as a senior consultant for Grant Thornton's Management Consulting Division concentrating on information systems, manufacturing and operations research. He earned an MBA in finance and accounting and MS in industrial engineering and operations research from Columbia University. He also received a BS with Honors in mechanical engineering from Columbia University's School of Engineering. In September 2001, he was awarded the Chartered Financial Analyst (CFA) charter.

²is a research analyst for Morgan Stanley. She graduated Summa Cum Laude from Tufts University with a double major of International Relations (Japan) and Quantitative Economics. She received her MBA from the Wharton School and MA in International Affairs (Japan) from the Lauder Institute at the University of Pennsylvania. She began looking at Japan's pension crisis in 1999 as a Fulbright Fellow at Osaka University and received the 2004 Reginald H. Jones Thesis Prize for her MA thesis on corporate pension reform in Japan.

Received 25 October 2006; Revised 25 October 2006.

Abstract

This paper tackles the mutually vexing issue of corporate pension reform in the US and Japan. Both countries are undergoing structural and demographic changes in their workforce and corporate governance, giving urgency to the problem of pension funding and solvency. Urgency has led to different responses at the political, corporate and societal levels. Behind this, we find legacy institutions and norms peculiar to each country that are evolving under different economic realities.