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Monday, July 12, 2010
A pension for their thoughts
A government panel headed by Prime Minister Naoto Kan announced late last month a seven-point principle for a future pension system. Creation of a reliable pension system is an urgent task facing Japan. The ruling and opposition parties must jointly rack their brains to improve Japan's pension system as the panel calls for.
The Democratic Party of Japan's manifesto for the Upper House election held over the weekend proposed unifying the nation's different pension schemes and ensuring a monthly pension of at least ¥70,000. The seven-point principle also calls for such unification, but it only proposes setting a pension floor without specifying the amount.
Although the DPJ's manifesto for last year's Lower House election proposed using consumption tax revenues to fund a new pension system, the seven-point principle is limited to stressing the need to secure a stable fund to which everyone contributes.
The panel also says that a new pension system should make clear to everyone that a relationship exists between financial contributions and payout benefits, that pension-related records will be kept so that any participant can check them, and that pension premiums will be collected without fail to ensure that everyone receives a pension.
At present, about 420,000 elderly people have no pension. If working-age younger people who have not paid enough in premiums are added, some 1.18 million people won't have pensions. People entitled only to the basic pension receive ¥48,000 a month on average — far less than the amount needed to maintain a decent life after retirement.
It will take dozens of years to set up a new, unified pension system. Therefore, it is urgent that the ruling and opposition parties begin work now on measures aimed at rescuing those who either don't receive a satisfactory pension at present or won't otherwise be eligible for one at retirement. Political parties have made various pension-related proposals that need not be mutually exclusive. The parties should work together so that people have less cause to worry about old age.