Japan Press Weekly

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2009 April 15 - 21 [WELFARE]

Pension benefits will be less than 50% of worker’s income

Akahata has found that the future amounts of employees’ pension benefits will shrink to less than half of the average after-tax income of active workers (ages between 25 and 64).

A Ministry of Health, Labor, and Welfare estimate shows that if the rate of premiums payment stays at around the present level of 65 percent, future pension benefits will be 49.2-49.35 percent of the present average earnings of active workers.

This proves that the ruling Liberal Democratic and Komei parties’ promise to the public that pension benefits would be more than 50 percent of the present take-home pay over the next 100 years was a lie.

Although the actual rate of premiums payment was about 64 percent, the LDP-Komei government told the public the figure of “50 percent” based on the unreasonably high premiums payment rate of 80 percent.

In 2004, the government adversely revised the pension system to raise premiums over the next 13 years in exchange for the “50 percent” rule.

The government will continue to raise the amounts of premiums but not keep the promise regarding benefits. This will inevitably give rise to public anger.