Koga says! Statement on the scandal involving the SIA’s waivers of pension premium payments
30 May 2006
On 29 May, the Social Insurance Agency (SIA) reported that SIA local offices have inappropriate waived pension premium payments for some 113,000 people in 26 of Japan’s 47 prefectures. The House of Representatives is now in the middle of discussing a bill for disbanding the SIA and establishing a new pension service agency. It is really regrettable that the scandal has resulted in betraying people’s trust in the pension system and the SIA.
The SIA reported that out of 113,000 waivers 82,000 are those made by SIA staff without any action or request by the policyholders themselves, for which the SIA should immediately contact the policyholders and redo the procedure to waive the payment at their own request. Furthermore, the SIA should also do an immediate investigation on all 2.7 million exemptions. We strongly ask to clear up the cause, identify who is responsible and adopt preventive measures in an immediate manner, which we believe is an only way to restore the confidence of people in pensions.
We point out the SIA’s governance, as well as the operational management of the SIA’s headquarters and local offices, as a cause of the injustice in terms that repeated investigations had not found out what really happened until the report publicized on 27 May. As, in addition to repeated scandals, the local offices’ nature of covering up truth is criticized, we request to improve the function of SIA’s internal governance and self-cleaning and establish a solid compliance structure as soon as possible
Although the SIA’s headquarters are reported not to have instructed inappropriate waivers, an investigation should be made also into possible involvement of the headquarters. It is necessary to take an action to increase the rate of collecting pension premiums, but the goal to increase the rate from 60% to 80% by the end of fiscal 2007, based on the existing the National Pension Plan, is questionable and should be reviewed.
A premium-based pension system covering all is now in question. RENGO asks for a drastic institutional reform, including the introduction of a tax-based basic pension and the review of legal waivers and waivers at request, in order to resolve the high rate of unpaid premiums and restore people’s confidence in pensions. We also ask for a new pension service agency to establish a governance structure with participation of representatives of policyholders and ensure that all staff would work with a pride to be engaged in the pension system. RENGO will continue working to this end.