EDITORIAL: The pension problem

Revamping the pension system has been a key campaign pledge of the Democratic Party of Japan in every recent national election. On Tuesday, the Kan administration came up with some basic pointers for a new system. We hope this will get the ball rolling for suprapartisan discussions.

The principles offer only a general direction; that everybody will be enrolled in a single system with a guaranteed minimum benefit. The DPJ in the past called for "a minimum guaranteed benefit of 70,000 yen ($790) a month, to be financed by tax revenues." But the administration has dropped this idea.

It turns out that the administration's position is less specific than the DPJ's campaign manifesto. But this is not such a bad thing in itself, as it means both the ruling and opposition camps can now try to seek common ground without being tied down to their past assertions.

The current pension system is fraught with problems. For instance, the kokumin nenkin national pension was originally meant primarily for independent business operators or self-employed people. But today, nearly 40 percent of people enrolled in this program are nonregular company workers who cannot enroll in the kosei nenkin pension system for company employees. Also, many of these people are unable to pay their premiums. There are fears that a growing portion of the population will face old age with no pension income or with only nominal income.

And there are questions, too, such as how far pension benefits will shrink over time due to the nation's low birthrate, and whether the pension system itself can really guarantee financial security in old age.

Various solutions are conceivable. The DPJ thinks a minimum guaranteed benefit is the way to go, while the Liberal Democratic Party and New Komeito also have a viable proposal: ensure that everyone has a base pension payment in full by combining tax-funded subsidies and premium cuts commensurate with one's income. Whichever method wins the day, the realistic approach would be to start with measures that are tailored for low-income people.

But fiscal constraints must be taken into consideration in determining the measures. The DPJ in the past insisted on tapping consumption tax revenues to fund the minimum guaranteed benefit. But given the nation's fiscal crisis and the fact that other areas of social security also require funding, it will be difficult to infuse massive tax revenues into the pension system alone.

The public certainly will not feel secure if any party, in its obsession with its pension policy, chooses to sideline programs that are meant to rebuild regional health care, improve the working conditions of caregivers, provide better day-care services, and so forth.

Given this situation, we propose that the ruling and opposition camps start working together on whatever reform they can agree on to deal with the problems faced by low-income senior citizens and people with no pension benefits or only nominal benefits.

As for integrating the nation's three pension systems, opinion is split on whether to treat self-employed people separately from the rest. We believe it would be more realistic to start with the integration of the kosei nenkin and the kyosai nenkin pension program for public servants and encourage nonregular company workers to enroll in the kosei nenkin system.

If the political parties are unable to proceed with the needed reform just because they refuse to yield their respective positions and cannot agree with one another, this will cause the greatest inconvenience to none other than the public at large.

How much can the nation afford on new programs? What ways are there to maintain an overall balance in paying for the pension system, health care, nursing care and child allowance? It is time for each political party to come up with realistic initiatives that are fiscally viable.

--The Asahi Shimbun, June 30