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Friday, June 1, 2007

Q&A

Poll-wary ruling bloc gropes to fix pension fiasco


Staff writer

The government is facing a crisis over its handling of the creaky public pension system, in part because the Social Insurance Agency scrambled the data on 50 million premium payments during a bungled shift to computerization in the 1980s. Since it cannot identify who made the payments, many pensioners are not being paid what they are entitled to.

The fiasco has sent Prime Minister Shinzo Abe's support ratings plunging to new lows ahead of the Upper House election in July. Although the opposition parties have tried to get to the bottom of the debacle by questioning Abe and his government in the Diet, the ruling bloc appeared hell-bent on ramming two hastily arranged bills on "pension reform" through the Lower House Thursday evening in a bid to pre-empt public unrest over the issue.

Below are some questions and answers about the scandal:

What are the political ramifications of the Social Insurance Agency scandal for the ruling bloc?

With public distrust of the pension system already looming large, Abe and his Liberal Democratic Party are nervous about voter sentiment ahead of the Upper House election.

The mishandled premium payments are painfully reminiscent of the nonpayment scandals of 2004, when it was revealed that some Cabinet members were refusing to pay into the public pension system. The revelations severely damaged the LDP's showing in the Upper House election that year.

In addition to mismanaging the data, the SIA has spent billions of yen in pension premiums to purchase luxurious resorts for government officials. Meanwhile, thousands of public servants have admitted peaking at the personal data of politicians and celebrities out of curiosity and were punished in 2005.

Many wonder, as well, if the system can continue to function as the population ages and the birthrate sags, leaving fewer workers to finance more retirees.

What happened in the 50 million cases of data mismanagement?

The names, addresses and dates of birth of the 50 million premium payment payers before 1997 no longer match that of any citizen enrolled in the public pension system.

That was the year the government introduced a new pension identification number system that gave each individual a single number. In the previous system, some people had multiple ID numbers according to the type of public pension program they were enrolled in. The programs differed for self-employed workers, company employees and civil servants.

How did this problem come to light?

The largest opposition party, the Democratic Party of Japan, uncovered the problem while scrutinizing a series of SIA scandals and brought up the issue during deliberations in the Lower House.

According to the DPJ, pension payments from 11.3 million self-employed workers and about 39.7 million company employees have sat unidentified since 1997, when new universal ID numbers were introduced. This is partially due to typing mistakes made by the SIA officials who computerized pension record data between 1984 and 1988, it said.

The DPJ has estimated that 1 million people may be receiving smaller pension payments than they are entitled to as a result of the bungling.

Has the government taken any steps to resolve the problem?

Reflecting the political stakes at risk, the ruling coalition has taken unilateral action in the Diet to address the explosive issue with unusual speed, a sign that the opposition says reflects a lack of thoroughness.

On Tuesday, the ruling bloc submitted a bill to the Diet to amend a five-year statute on pension claims so people who revise their personal data can still receive a pension.

That bill and another that would abolish the SIA in 2010 and replace it with a quasi-governmental entity were poised to clear the Lower House just two days later.

Abe said Wednesday the SIA will finish within a year matching data on the 50 million cases and then alert people whose payment records are found to be inadequate in the following six months.

But some agency officials have said many of the 50 million cases may remain unidentified.

The DPJ urged the SIA to examine all written records in order to correct the personal data that was inputted into the computers. The party also urged disclosure of pension records to the public so everyone enrolled in the pension system can double-check their payment records.

But the ruling camp has been reluctant to do this because it would be extremely "time-consuming."



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The Japan Times

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