The Yomiuri ShimbunHow the pension system should function has emerged as a key issue in the House of Councillors election. How do people plan for their lives in old age based on their pension benefits? It is hoped that this will serve as an opportunity to listen to the views of each party and think carefully about them.
The pension benefits received by elderly people mainly consist of premiums paid by working-age generations. This is why pension premiums are said to be similar to an allowance given by the working-age generations to the elderly.
Due to the declining birthrate and aging population, the elderly population will continue to increase until around 2040, while the working-age generations will rapidly decline. To prevent the pension system from collapsing, there is no other choice but to curb pension payments.
A system to deal with this is in place — the macroeconomic slide mechanism introduced under the pension system revisions in 2004. The government will gradually lower the level of pension benefits in line with the pace of the declining birthrate and aging population.
The sustainability of the pension system itself is secured, thus there is no need to be unnecessarily anxious about it.
However, this system is not functioning sufficiently. There are rules restricting the implementation of the system when the economic situation deteriorates, keeping the level of benefits high. If the curtailment of pension benefits continues to be delayed, the amount of pension funds for future generations will decrease, further lowering the level of benefits.
Regardless of the economic situation, it is necessary to steadily implement macroeconomic slides.
Concrete measures needed
Assuming that the level of future benefits will fall, it is essential to view the situation from the perspective of healthy and motivated elderly people working as long as possible.
Individuals will receive more income in their lifetime. With elderly people also supporting the pension system, it will benefit the system financially.
To achieve this, it is necessary to secure not only companies but also a variety of places to work, including activities that contribute to society. It is hoped that each party will debate concrete measures.
With people working for a long time, the starting age for receiving pension benefits will be pushed back, and therefore they will receive additional pension benefits after retirement. This lifestyle is envisioned.
Under the current system, the starting age for receiving pension benefits is set at 65 in principle, and if it is delayed until 66 or later, the amount of benefits received increases. In addition, the government is considering a plan to make it possible to delay the starting age beyond 70 to increase the amount received.
Another important issue is how to reduce the number of people who have trouble making ends meet in their old age.
Many part-time and other nonregular workers are excluded from employees’ pension insurance systems and they can only receive basic pension benefits after retirement.
Several parties have announced plans to expand the scope of people eligible to receive employees’ pension benefits. It is hoped they will present road maps for realizing the plans.