The public pension system needs to be reformed — through such steps as cuts in payments to high-income earners — if it is to withstand the effects of a rapidly aging population, Finance Minister Hiroshi Mitsuzuka said April 15.
Speaking at a news conference, the finance minister said that given the declining birthrate and increase in the elderly population, it is obvious the pension system will collapse if left unattended.
Both the government and the public will have to begin serious debate on the issue now, before pension-related figures are recalculated in 1999, he said. “If we leave the matter unattended, it would mean that we have not carried out our responsibilities as lawmakers,” he added.
On April 14, Health and Welfare Minister Junichiro Koizumi suggested that the age at which retirees begin receiving pension payments be raised beyond the 65-year mark from 2013. Mitsuzuka said the revised pension system should incorporate the idea of “moderate welfare through a moderate burden,” and that people should make efforts to help themselves, such as by purchasing annuity insurance from private insurance firms.
He also indicated that pension payments for retirees from high-income jobs should be reviewed, a point Prime Minister Ryutaro Hashimoto also included when he drew up his principles for fiscal reconsolidation last month.
Social security-related expenditures constituted 33.4 percent of all general spending in the initial fiscal 1997 budget, growing 1.8 percent from the budget for the previous fiscal year. In fiscal 1995, total public pension payments surpassed the 30 trillion yen mark for the first time, totaling roughly 31.85 trillion yen, with the number of recipients logging a record 32.36 million.