EDITORIAL: Pension premiums

A record low 60 percent of premiums due for the national pension program were paid in fiscal 2009.

Part of the reason for the high ratio of nonpayment is a rise in the number of people facing financial difficulties in these dire economic times. In addition, the government's efforts to exempt low-income earners from premium payments and persuade people in arrears to pay their contributions were not enough.

The Social Insurance Agency was disbanded in the wake of scandals, and the Japan Pension Service took over its functions at the beginning of this year.

In that process, officials may have failed to do their basic job, including collecting premiums and paying out benefits. Those in charge need to ensure the system can carry out its principal mission.

In fiscal 2009, 4.19 million home visits were made to collect premiums from people in arrears, less than half the number of visits in the previous year, according to the welfare ministry.

That is because, in a move to streamline its organization and improve operational efficiency, the Social Insurance Agency did away with time-consuming home visits in favor of telephone calls.

The number of forced premium collections from those who refused to pay up despite repeated requests, through such means as seizure of assets, also fell sharply.

The reason appears to be that officials have been busy dealing with problems with pension records and were unable to deploy enough manpower to handle the basic tasks.

But the growing nonpayment ratio has direct bearing on the fairness of the public pension system.

People who fail to pay premiums could face significant disadvantages.

They may end up ineligible for basic disability pension benefits should they become afflicted with disabilities due to disease or accident. They could also face an old age with little or no pension.

The public pension program operations simply must be made more efficient. But basic tasks must be carried out properly to protect the core functions, even if they require much time and energy.

Home visits to people in arrears can be made mandatory if the task of premium collection is contracted out to private-sector businesses. The number of employees in charge of forced premium collections can be secured by reviewing staff allocations or through cooperation with the National Tax Agency.

Another area requiring close examination is the structural problem contributing to the increase in nonpayments.

The national pension program used to cover mostly self-employed people. But now, nonregular workers such as part-timers account for about 40 percent of the subscribers. The payment ratio is low among these nonregular workers.

For those who fail to pay premiums, the average annual income is a mere 1.13 million yen ($15,000). The monthly premium of about 15,000 yen is thus a heavy burden.

Many of these low-income earners must be eligible for premium exemption. If they are exempted from paying, the exemption period will be counted as part of their total subscription period, which is used to determine how much the subscriber can receive or whether he or she is eligible for benefits.

In addition, half of the premiums paid by the government during the period of exemption are reflected in the amount of benefits these people are entitled to.

We should deal carefully with cases of nonpayment by finding out whether those in arrears cannot pay or simply do not pay despite being able to do so.

It is high time the public pension system was revamped. If nonregular workers were covered by the pension program for corporate employees, their premiums would be based on their income instead of fixed sums. It would be much easier for them to pay.

The ruling and opposition parties generally agree on the need to expand the pension program for corporate employees to cover others. It is time to start revising the law.

--The Asahi Shimbun, Aug. 13