HL&W Ministry proposes major adverse changes in pension system
The Health, Labor and Welfare Ministry on November 17 proposed major adverse changes in the state-run pension system to be effective from FY 2004.
The proposal calls for the rate of premiums, which is now 13.58 percent of the worker's annual income, to be increased in phases and pegged at 20 percent after FY 2022. The amount of employee pension, on the other hand, will be decreased to 50 percent, from the present 59.4 percent of the worker's take-home wage.
The government and ruling parties will discuss the HL&W Ministry's proposal and submit bills to the next year's regular Diet session.
If the outline of the ministry proposal is maintained, changes in percentages in the payment of premiums and pensions will be automatically implemented without parliamentary approval.
If the percentage of premiums is increased to 20 percent, an average insured person for employee pension, with a monthly income of 360,000 yen, will have to pay an extra 190,000 yen a year in premiums.
The HL&W Ministry has shelved the decision to increase the percentage of the state share of burden for the basic pension, on which the public pension system is based, from the present 33 percent to 50 percent. (end)
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