Japanese Trade Union Confederation (RENGO)

Statement: DPJ Presents a Pension Reform Bill

1. The "Next Cabinet" of the Democratic Party of Japan (DPJ) endorsed today a bill to facilitate drastic pension reforms. The bills will be presented in the plenary of the House of Representatives on 9 April.



2. The bill is described by its name to be "a bill to facilitate drastic reforms of the public pension system in order to realise a society where the people enjoy relieved life in their advanced age", being apparently different from the government bills. The bill aims at adopting basic philosophy and lines concerning pension reforms. It proposes the establishment of a Pension Reform Committee by which reforms would be facilitated based on a national consensus.



3. The most outstanding feature of the bill is that the current structure would be replaced with a new two-storey structure composed of the minimum-secured pension and the income-related pension. Premiums would be determined by multiplying incomes by a fixed rate that should be the current one.
   
   The minimum-secured pension would be provided to pensioners receiving insufficient amount of pensions to make stable post-retirement lives possible and would be paid out of the National Treasury in full. Provided the government's burden to support the basic pension plan is raised to half, the remaining half would be financed with the income of a welfare-purpose consumption tax. The amount of the income-related pension would be determined by the total amount of premiums.
   
   The DPJ's bill proposes that benefits of the minimum-secured pension would be reduced in proportion to those of the income-related pension and else, which make it different from Rengo's view. However, they are basically in the same line in that the system would be composed of two stories: the first floor financed by taxes and the second by income-related premiums.



4. A full-scale deliberations on pension reforms will soon start in the Diet with the presentation of the bill. As the bill makes a concrete proposal for a direction of reviewing the structure, the government bill will be shown to be a temporary, evasive solution or a mere tinkering of numbers without touching upon a radical reform.
   
   We are determined to strengthen cooperation with the DPJ and the Social Democratic Party in and out of the House and enhance workplace- and community-based campaigns, including by organising an in-House rally on 9 April.