There is great significance in improving the foundation of the quality of life in old age for part-timers and other non-regular workers.
Laws related to pension system reform have been passed. The range of people eligible for employee pensions will be expanded to include short-term workers from companies with fewer employees.
Currently, companies are required to join the employee pension program if they meet the requirements, such as having "501 or more employees." The program will be expanded to include "101 or more" in October 2022 and "51 or more" in October 2024. This is expected to add a total of about 650,000 new members to the program.
The pension system is a two-tiered scheme comprising the national pension program for which all people are eligible, and the employee pension program for which salaried workers are eligible. Many non-regular workers are not eligible for the employee pension, and they can only receive benefits from the national pension in their old age. These benefits are a maximum of about 65,000 yen a month.
Non-regular workers account for about 40% of the workforce. Many people, including those who faced an era in which it was difficult to secure regular employment, are worried about their future. It is important to steadily implement the reforms to prevent impoverishment.
Expanding eligibility for the program in stages in consideration of companies that have to pay half of their premiums can be said to be a realistic decision. A special provision has also been established to allow companies heavily affected by the novel coronavirus to postpone the payment of the premiums by one year. The government should make efforts to make this known throughout the country.
Another point that has been reviewed in the reforms is a rule under which pension benefits are decreased for elderly people who have a certain amount of income.
Currently, pension benefits are reduced when the combined amount of monthly wages and the benefits exceeds 280,000 yen for those who are 60 to 64 years old. This threshold will be raised to 470,000 yen from fiscal 2022.
The number of cases in which benefits do not decrease while a wage is earned is likely to increase, and it is expected that motivated older people will be more willing to work.
What is regrettable is that reform of the balancing mechanism that gradually lowers benefit levels, known as "macroeconomic slide," has been postponed. It has not been implemented as expected under deflation and the reduction has been delayed.
It is by that amount that future generations' pension benefits will be reduced. The mechanism should be revised so that it can be implemented regardless of economic conditions. In order to maintain the credibility of the pension system in the face of the declining birthrate and the aging of the population, it is inevitable that benefits will be curtailed.
There is also a problem in that many workers are eligible for the employee pension program but are not yet enrolled in it because their companies have failed to follow the necessary procedures. According to the Health, Labor and Welfare Ministry, the number of such workers is estimated at about 1.56 million. Apparently, many companies are reluctant to pay the premiums.
The government should step up its monitoring of companies deemed to be having trouble handling the matter by giving instructions and conducting on-site inspections.
Pensions are the foundation that supports the lives of the elderly. It is hoped that the pension system and its management will be constantly reviewed to improve sustainability and dispel public distrust in the system.
-- The original Japanese article appeared in The Yomiuri Shimbun on June 2, 2020.
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