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Saturday, Dec. 8, 2012
Bridging the pension gap
Because the government is gradually raising the age at which retirees can start receiving the kosei nenkin pension — a pension for corporate workers — it is requiring companies by law from April 2013 to re-employ in principle employees who are age 60 or older and want to continue working, until they qualify to receive their pensions.
It is inevitable that the new system will lead to an increase in companies' personnel costs. Both the government and companies need to make serious efforts to ensure that the new system is smoothly implemented.
At present, male corporate workers can start receiving the kosei nenkin pension at age 60. The age will be raised to 61 in April 2013. After that, the age will be raised by one year, every three years, until April 2025 when the pension start age will be 65. For female corporate workers, the same changes are scheduled to take place five years later than male workers.
Although there is already a re-employment system for workers who have passed the retirement age, it has problems. Conditions for re-employment agreed to by labor and management are often severe and many workers who seek to be re-employed are rejected. Only about 50 percent of companies hire all postretirement age employees who desire to keep working.
The law to stabilize the employment of older workers prohibits companies from setting the retirement age below 60. To ensure re-employment of workers who have reached retirement age, it requires companies to raise or abolish the retirement age or to offer jobs to postretirement workers who seek re-employment.
According to a June 1 survey by the health, welfare and labor ministry, about 83 percent of companies want to adopt a re-employment scheme for postretirement age workers, rather than raising or abolishing the retirement age.
Under the revision of a re-employment promotion law, which passed the Diet in September, companies will be required from April 2013 to employ all workers who desire re-employment unless they have health problems or have demonstrated behavior that merits their dismissal. If companies fail to fulfill this duty, their names will be made public — a harsher treatment than the current practice of giving advice to such companies. But the revision includes a measure designed to lighten the burden of companies in providing jobs to workers seeking re-employment.
Under the revision, companies will be allowed to offer jobs not only at the parent company but also at subsidiaries and group companies. This expands opportunities but also allows companies to make employment offers that they know will likely be rejected by people who do not wish to relocate.
But the biggest obstacle facing the re-employment system is the poor condition of the Japanese economy. In view of the need to rehire retirees, companies should strive to develop new business fields that can generate more profits and create more job opportunities.
For its part, the government needs to help expand employment opportunities in general by taking measures to develop growth fields. It has already named medical and nursing care services, environment-friendly industry and agriculture as new growth fields in its long-term policy. It needs to work out concrete and aggressive measures to develop these fields.