EDITORIAL: New pension entity

The Japan Pension Service, successor to the scandal-plagued Social Insurance Agency, came into being at the start of the year. The SIA was disbanded because it had lost the public trust over its gross mismanagement of pension records over the years.

The JPS is a special public corporation consigned by the government to manage the nation's pension affairs. Unlike with the SIA, its employees are not public servants. The shakeup was decided by the previous coalition government of the Liberal Democratic Party and New Komeito.

A huge number of pension records for which the beneficiaries remain unidentified are in limbo. A fraudulent approach was used to create the impression of a high premium compliance rate. The SIA bears a heavy responsibility for aggravating public distrust in the pension system. It makes perfect sense, therefore, that bold reforms were demanded to overhaul the caliber of the organization and the awareness of its employees.

When it was still in opposition, the Democratic Party of Japan voiced doubts about the wisdom of splitting off the vital work of pension management from the government and whether the new organization would obscure the pension record issue. From early on, the DPJ also proposed the idea of creating a revenue agency to collect pension premiums and taxes alike.

Last year's change in government occurred just as preparations to launch the new pension service were taking shape. The DPJ thus had little choice but to ratify the JPS after assuming the reins of power in September.

Regardless of the circumstances, the JPS is up and running. It must now join with the administration of Prime Minister Yukio Hatoyama in a concerted push to restore public confidence in the pension system. The JPS has compiled a list of 10 pledges to customers. One of these is to answer incoming phone calls within three rings. Of far greater importance, however, will be its efforts to engineer a recovery in the payment rate of national pension premiums. The level of that compliance has sunk to under 70 percent.

Even when the SIA existed, attempts were also made to consign to the private sector such tasks as tracking down people in arrears with their premium payments. That experiment was unsuccessful. One reason was that officials didn't bother to visit people living off the beaten track. Other lethargic practices were also at play. It is important to learn from those mistakes and produce better results.

The DPJ has yet to abandon the idea of a revenue agency. In fact, the party continues to say that the newly created JPS will be junked in the future.

Thus, we can only wonder if an organization that is destined to be shut down will be capable of achieving the objectives expected of it.

Rather than thinking about returning the JPS to the status of a government organization, priority should be placed on working through this new service to raise the compliance rate and put pension record management and payment operations back on track.

After that, if the government still favors the revenue agency approach, the route and reasoning toward that end should be clarified in terms that are credible to the public.

The roots of pension distrust run deep. Many people fear they will fail to collect decent benefits in the future even if they are continuing to pay their premiums today.

Such anxieties will never be dispelled without serious debate of system reform and ways to establish reliable revenue sources. To accelerate progress in that direction as well, no-nonsense efforts are needed to reduce the level of premiums in arrears and bring greater soundness to public pension records.

--The Asahi Shimbun, Jan. 13