At the 27th session of the Central Executive Committee on 19 August 1999, Rengo confirmed its basic position on the pension reform, in particular on company pension. It emphasized that company pension should remain a fixed-benefit type in principle.

Rengo's basic position on company pension

1. Public pension as a pillar of guaranteeing the livelihood of the elderly
   
   The pillar of guaranteeing the livelihood of the elderly for all workers should be public pension. Neither company pension applied to limited companies nor personal pension subject to voluntary participation can replace public pension. They rather supplement it. To increase the portion of company and personal pensions and to reduce the level of public pension will only grew the anxiety about lives in old age and the sense of inequality.
   
   It is the responsibility of the government and employers to provide those working earnestly with the security and reliability of lives in old age. In this sense, the idea of the business world that public pension scheme be diminished to expand personal pension, which is even supported by some scholars and bureaucrats is out of the question.
   
   The flourishing of the 401(k) in the United States mainly depends on the rise of stock prices and its stability is not guaranteed for future It is a dangerous choice to leave the result of hard working in the hand of speculative international financial transactions.
   
   
2. Retirement allowance as a core of company pension
   
   Company pension is private pension. And a lump-sum payment of retirement allowance is a core of company pension, which is a major element of working conditions. Lump-sum retirement allowance should be paid in compliance with a collective agreement and is not changing according to exchange or interest rate. It is also a fixed-benefit even if the payment is divided into benefits.
   
   
3. Employees' pension fund and tax-qualified pension
   
   Company pension is private pension and thus it should be independently designed taking into account various conditions. In this sense, it is now necessary to review the system of the overall pension system, in particular the contribution of employees' pension fund to the employees' pension insurance, that is, contribution by a private fund to public pension scheme. This is not in compliance with the basic principle of private funds. Such "distortion" has brought about the bankruptcies of company pension funds and caused the growing damage on workers concerned. Currently it is possible to transfer from the tax-qualified pension to employees' pension funds, but not to transfer in the opposite way. The transferability between the pension and the fund should be also reviewed in the view of enacting a new law regulating retirement allowance and company pension funds.
   
   
4. Introduction of the Japanese version of the 401(k)
   
   Fixed-contribution types of pension already exist; for example, personal pension and "nest-egg" pension. Furthermore, some of company pensions adopt fixed-contribution pattern in designing benefits. What is now being discussed is the introduction of favorable tax treatment, which is currently adapted to public pension and retirement allowance, and the shift of responsibilities and risks for capital investment to individual workers.
   
   The introduction of the 401(k) with all responsibility left to individuals will be the cause of future trouble taking into consideration the following points: the lack of transparency in Japanese insurance and debts markets mainly participated by institutional investors; social problems concerning the fluctuating insurance and mortgage security; insufficient knowledge and skills in investment market of Japanese people; and Japanese culture with the priority to cautious preparations for the future.
   
   
5. Increasing the abatement and expanding "nest-egg" savings as measures to narrow the differential
   
   The retirement allowance tax system, which is currently applied only to the fixed-benefit company pension, is favorable only to large-scale companies. Some insists the advantage of tax concessions given to the fixed-contribution personal pension. They say that such tax concessions entitle small companies without the company pension fund or the tax-qualified pension to favorable tax treatment. However, it is obvious that narrowing the differential is not the objective of the Liberal Democratic Party in introducing the fixed-benefit pension. Such tax deduction is more favorable to large-scale companies than to small companies. In order to narrow the differential, a measure should be taken to increase the abatement to premium of life insurance and pension insurance. The Ministry of Labour is now planning to reform the workers' "next-egg" system together with the personal pension. However, the "nest-egg" has its own role to play. Thus, it is now necessary to expand/reform the "nest-egg" based on such principles.

On the occasion of the 54th anniversary of A-bomb, Rengo organized the peace meetings in Hiroshima (5 August) and in Nagasaki (8 August) and renewed its wish for peace.

Photo:More than 3000 people are gathering in the Hiroshima Meeting. (5 August 1999)

Photo:Rengo Nagasaki and Nagasaki's citizens are sending off the spirits of the dead on lanterns floated on the waters of a river. (9 August 1999)