- Today, the Pension Working Party of the Ministry’s Social Security Advisory
Council published “the report on pension reform”. The report carries
opinions of both sides on crucial issues concerning benefits and premiums, pension
for housewives, a tax-based system, etc. However, the issues were not well deliberated
and the report is just a result of following the Council’s timetable. Lacking
concrete measures, the report has not taken shape yet.
- As regards benefits and premiums, the report states that it is appropriate
to introduce a “fixed-premiums and fluctuating-benefits system”, with
a supplementary note as Rengo’s opinion: “Such system will reduce
the level of benefits and citizens’ distrust will increase. It should not
be introduced”. Furthermore, the report does not address the problem of
Kokumin Nenkin (for self-employed and unemployed citizens) that 40% of the people
who should be paying Kokumin Nenkin are not doing so, while saying “a tax-based
system will be a crucial issue at the next review”. Concerning Class 3 Insured
(dependent spouses of salaried workers), the report says members agreed on cuts
in Class 3 benefits, but does not indicate concrete measures. Lastly, the Council
did not spend sufficient time to discuss transparency in the size of the Pension
reserve fund and the management of the fund.
- The Ministry of Welfare, Labour and Health will formulate the gist of a revision
bill on the basis of the report and Minister’ proposals that were earlier
published, which will then become a Government bill after ironing out differences
among the ruling parties by the end of the year. However, the report does not
discuss sufficiently many important issues and does not reflect the reality of
what citizens feel in their daily lives. The final governmental bill should be
based on a broader consensus following sufficient discussions with ruling and
opposition parties, as well as representatives of beneficiaries themselves.
The governmental bill must, with a view to improve the reliability of the pension
system, include concrete measures concerning: - the increase of the portion paid
out of the National Treasury up to 50% (currently 33.3%) and resources; - a tax-based
system to finance Kokumin Nenkin; and – measures to maintain the current
level of benefits.
- Rengo has been suggesting that, with a view to establishing the pension system
by all for all, the basic pension be financed by tax. The tax-based system would
maintain the current benefit level with premiums into Kosei Nenkin (for
company employees) rated only 15% of their salaries. Rengo will continue working
on the establishment of a secure and reliable pension system.