The government plans to reduce public pensions over three years starting in fiscal 2012, saying that it has overpaid by 2.5 percent. The overpayment has resulted from the Liberal Democratic Party-Komeito government's decision.
Public pensions are supposed to decrease in accordance with falls in the price index. Although the index fell from fiscal 2000 to fiscal 2002, the LDP-Komeito government enacted a special law to stop the public pension reductions, insisting that the reductions would greatly affect people's lives. The special law was aimed at currying voters' favor.
The Democratic Party of Japan government says that because current pensions are paid out of premiums paid by the current working population, overpayment is unfair to them.