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Saturday, Oct. 27, 2012
A chance to pay pension arrears
At the beginning of October, a system started to allow people who are up to 10 years in arrears on premium payments for the kokumin nenkin pension to pay the unpaid premiums. Kokumin nenkin mainly covers self-employed or jobless people, but also serves as the basic pension for corporate workers. The deferred payment system will be in force for three years. To reduce the number of pensionless people or people eligible to receive only a fraction of full pension benefits, the government must make people aware of the new system.
In principle, kokumin nenkin is based on the idea that people pay the premiums for 40 years from the age of 20 to the age of 60 to get the full benefits. They have to pay premiums for 25 years or longer to qualify to receive a pension. The deferred payment system is designed to help people whose accumulated payment period is less than 25 years or who want to increase their pension benefits because their accumulated payment period is less than 40 years.
It covers the following three groups — people between age 20 and 60 who failed to pay premiums within the past 10 years; people between 60 and 65 who are trying to achieve the 25-year payment requirement but are in arrears (optional participation) and people between 65 and 70 who are also trying to fulfill the 25-year payment requirement but are in arrears (special optional participation).
If people apply to make deferred payments in October, they can pay premiums that are in arrears in and after October 2002. But they have to pay them plus additional charges. For example, the amount of monthly deferred payment for fiscal 2002 will be ¥13,300 plus an additional charge of ¥1,640. Deferred payment for one month translates into an additional yearly pension benefit of ¥1,638.
The health and welfare ministry estimates that with the deferred payment system, up to 16 million people will be able to increase pension benefits and up to 400,000 will become eligible to receive pensions. Unfortunately, many people are still unaware of the deferred payment system. The government should take steps to rectify this, for example by placing notices in post offices, government offices and other public places. Those interested should have their kiso nenkin (basic pension) number ready and call 0570-011-050 for more information.
Another problem is that many participants in the kokumin nenkin pension system are in a low-income bracket and may not be able to make the deferred payments even if they want to. To help such people, the government should consider reducing the amount of unpaid premiums to be paid. Doing so will help to ensure that fewer people fall through gaps in the social safety net.