28 October 1998

Kiyoshi SASAMORI
General Secretary
Japanese Trade Union Confederation (JTUC-RENGO)

1. Today, the Ministry of Health and Welfare presented the ruling Liberal Democratic Party (LDP) with a reform proposal entitled "Pension Systems for the 21st Century," and simultaneously made the proposal public. Three alternatives are described, but they all are simply differences in methods inside a framework for a "20% cut in benefits." This "fidgeting with figures" is the same as that which has been used since the proposal entitled "Five Choices," meaning a choice between greatly reducing the level of benefits or pushing up the pensionable age with a small-scale reduction, and thus cannot be called reform.
   
   
2. What is really needed currently in terms of pension system reform is the transformation of the public pension system into one, which can dispel anxiety and give confidence to people. Accordingly, there is a need to address items which are currently under discussion such as raising the proportion of public funds used for basic pension benefits and changing the system for the use of tax money, as well as a review of huge reserve funds, which tend to be used in ways that raise questions. However, the Ministry of Health Welfare has ignored these issues, and from beginning to end its proposal is nothing but "fidgeting with figures." If they present such a dark scenario where there are no fundamental reforms, but merely a holding down of payments, the people will surely become increasingly anxious and distrustful about the pension systems.
   
   
3. Concretely, the following eight items are included in the proposal: (1) a sliding system; (2) a raising of the pensionable age for old age pensions for active employees into the late 60s; (3) a raising of the pensionable age for employees' pension insurance (for the earnings-based component) from the early 60s, where it is set now; (4) an increase in the range of the insurance premium (ratio); (5) the introduction of a system to which calculates the premium on total remuneration; (6) the establishment of a system to exempt half of the national pension premiums; (7) the establishment of a special system in the national pension premium for students; and (8) an exemption of the contribution of employers from the employee's pension insurance premiums during the period a worker is on a childcare or nursing care leave. We previously explained that numbers (1) to (3) are nothing but a negative revision, with premiums raised and benefits cut. Item (7) is simply an attempt to fidget with the system, and (6) is likely to lead to an increase in the number of people failing to register for the system or failing to make payments. Item (8) is a measure to unilaterally reduce the contribution of employers. Item (4) is nothing more than a measure that accompanies a cut in benefits. The proposal alludes to a "consideration to the severity of the economic situation" by suggesting a freeze in raises in premiums for the immediate future. But fails to mention the issue of the use of pension reserve funds, which ought naturally to be reviewed in considering the pension system within the entire economy. No mention at all was made of the problem of women and pensions, and the proposal also neglects to touch on a review of the deduction ratio for the deduction pension plan. In the final analysis, the only part of this proposal that can be seen, as a step forward is the introduction of a system, which calculates premiums on total remuneration.
   
   
4. The current proposal, which has neglected discussions on a fundamental reform of the basic pension, and which turns its back on the expectations and interest of the people, can in no way be called a proposal for "pension systems for the 21st century." RENGO has strongly criticized this "backward looking" debate from the time it was deliberated in the advisory council, and instead proposed a vision for a pension system that could provide security and confidence, clarifying independently how this could be realized financially. And on the basis of this, RENGO will, with strong action and solidarity with all classes of working people, defeat this "negative revision," and put all our efforts into realizing genuine reform of the pension systems.