Issue of how to prepare retirement funds should be discussed calmly

The Yomiuri ShimbunIt must be said that stirring up anxiety about the public pension system is unproductive. Rather, the government and the ruling and opposition parties should calmly discuss how to prepare for the nation’s super-aging society.

A report by an expert panel of the Financial Services Agency has caused a stir.

The report says that a couple in which the husband is 65 or older and the wife is 60 or older would run “a monthly deficit of ¥50,000” on average if they lived only on public pension benefits. That would result in a need for the couple to withdraw about ¥20 million from their financial assets over the next 30 years.

The main purpose of the report is to stress the need to start building assets early with an eye on longevity. It can be said that this issue was raised timely.

The provocative word “deficit” and an expression giving the impression that all households need to build assets of ¥20 million spread quickly and drew criticism. As this is a sensitive issue directly connected to people’s lives, it is undeniable that the report lacks consideration.

The estimate itself was merely a mechanical calculation of a deficit based on the average of the Family Income and Expenditure Survey. The lives of elderly people greatly vary depending on such factors as their savings during their working years and whether their children live with them. It is also possible to cut living expenses according to their income levels.

Avoid scaremongering

The failure to explain such circumstances in a careful manner aroused public anxiety and fueled needless confusion. The FSA bears heavy responsibility for that.

Taro Aso, state minister for financial services, said he would not accept the report. This move is apparently aimed at avoiding a situation in which the pension issue becomes a focus in the upcoming House of Councillors election.

Aso’s refusal to accept the report is questionable as he consulted the panel himself. It is regrettable that the results of a series of discussions among experts will not be used in policymaking.

Improvements are hoped for in an atmosphere in which the public thinks about ways of life planning after retirement.

In the 2004 pension reform, the government put in place a mechanism to gradually lower the level of pension benefits to reduce the burden on future generations. The government said that the reform’s aim is to ensure the sustainability of the pension system and allow for “100 years of security.”

Opposition parties have criticized the estimate, asking whether the claim of 100 years of security was a lie, and have been aggressive toward the government, which has asked the public to make self-reliant efforts.

However, it is questionable to have discussions that mix up the two issues: the system’s long-term stability and individual life security. In the first place, it has never been assumed that all of an individual’s expenditures would be covered by pension benefits under the system. Assertions making it sound as if the system has been shaken must be avoided.

With the declining birthrate and aging population, it is inevitable that pension benefits will be curbed, even while the benefits remain a major source of income for elderly households. There is also a system in which people may delay the age at which they start receiving pension benefits in exchange for increasing the annual amount of benefits they will receive.

It is essential for the ruling and opposition parties to hold constructive discussions on how the government will raise funds to support people’s post-retirement lives.

(From The Yomiuri Shimbun, June 15, 2019)Speech


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