Naoyuki Haga, chief secretary of the Social Insurance Agency employee union, fears he and many of his coworkers will lose their jobs when a new government-backed corporation begins handling pension payments in 2010 and the SIA is closed down.
|Pedestrians walk past the scandal-tainted Social Insurance Agency in the Kasumigaseki bureaucratic center in Tokyo last month.
JUN HONGO PHOTO
Haga and his colleagues have also become easy targets of criticism for the fiasco involving some 50 million unidentified pension premium payment records. They have been slammed by the media, pension recipients and politicians for sloppy handling of data.
“We are booed and branded as slackers even though in reality many are working very hard to help improve the situation. And yet we have to face the fear of losing our jobs,” Haga said. “Can you imagine working under such conditions?”
Prime Minister Shinzo Abe, desperate to keep his scandal-ridden Cabinet afloat ahead of the July 29 Upper House election, has also lashed out at the SIA’s ranks, saying their protected status as public servants led to their laxity — one reason for creating the new body to handle the public pension fund.
An investigative panel of the Internal Affairs and Communications Ministry is probing to determine the root of the problem and who was responsible for the fiasco. But critics say the pension system has been mismanaged for decades under a less than watchful eye by lawmakers. The record debacle has only recently drawn public outrage, after it was revealed by the Democratic Party of Japan.
“Bureaucrats created the pension system from the beginning in order to create ‘amakudari’ organizations” where they can land lucrative jobs after they retire, including the cost-ineffective Greenpia resorts, said journalist Tatsuya Iwase, who has written two books on pension problems, one in 2003 and the other in 2004.
Takeo Hanazawa, who was a section chief between 1942 and 1945 in the old Health and Welfare Ministry’s pension bureau, recounts in a book edited by a welfare ministry-affiliated organization and published in 1988 that after the Employees Pension Insurance System for salaried workers was created in 1944, bureaucrats felt an overriding sense of power.
“(The pension fund) has trillions of, yen so even first-class banks cannot match it,” he said in the book. “(We) can create foundations such as an employees pension insurance fund, and top officials (of such organizations) have power equivalent to that of the Bank of Japan governor. After welfare ministry officials retire, they would have no difficulty finding jobs. (This could) secure (jobs for) thousands of people.”
Hanazawa said ministry officials felt they could tap the pension fund as much as they wanted because it would be years before payouts started.
The ministry used the employee pension fund and the National Pension Fund, created in 1961 mainly for self-employed people, to establish numerous affiliated organizations, providing amakudari positions for about 2,300 retired bureaucrats as of 1999, according to Iwase.
In the 1980s, pension premiums funded construction of 13 Greenpia health resorts at a total cost of 195.3 billion yen. Most of the facilities operated in the red and were ultimately sold off to local governments or private companies by the end of 2005 for only 4.8 billion yen.
Public pension fund money also went for excessive purchases of luxury cars for SIA officials and for their wining and dining. Rank-and-file SIA employees were provided massage machines in their offices and given baseball and concert tickets, which were categorized as official expenses. The SIA did not stop such practices until they were exposed in 2004.
Iwase thus believes 6.57 trillion yen in pension premiums was squandered between fiscal 1961 and 2006.
Haga of the SIA labor union said lawmakers and top bureaucrats who maintained the corrupt system should be held responsible for the record-keeping scandal, because it wasn’t due to ethical shortcomings on the part of SIA rank and file.
It is true the union struck a comfortable deal with the agency in which the SIA promised to provide agreeable working conditions, and not require employees to make more than “5,000 keystrokes a day” on their computer terminals — a threshold the union claims could affect worker health.
The agreement, signed in 1979, had an additional clause that gave employees the right to 15 minutes away from computer screens for every 50 minutes worked.
Haga admitted improprieties occurred among the rank and file, including a social insurance office worker in Nagano who was arrested in 1996 for embezzling 1.9 million yen in pension payments.
But Haga, who voluntarily gave up part of his summer bonus as a gesture of taking responsibility for the pension fiasco, disagreed with allegations that he and his coworkers slacked off, and instead claimed they have merely become the scapegoats of the scandal.
He noted the 5,000 keystroke agreement was not strictly adhered to, because “it wouldn’t be possible to work if such rules were actually observed.”
Isao Sugaya, director of planning at the All-Japan Prefectural and Municipal Workers Union, sides with Haga.
“The pension system was built based on the government’s assumption that everyone would keep their pension payment receipts and that they would visit social insurance offices with all of their records intact,” he said.
This proved naive, however, as many retirees and employers lost track of their receipts. Inaccurately filed names and birth dates became an obstacle in matching pensioners with their accounts when the government in 1997 unified 300 million accounts by giving people a single ID number, leading to today’s 50 million unidentified payment records. It was known a problem existed, but the sheer size was kept under wraps.
“The pension fiasco was triggered by (the Liberal Democratic Party and top bureaucrats) and those who created the system,” Sugaya said.
DPJ lawmaker Mitsuru Sakurai, who sits on the Upper House Health, Labor and Welfare Committee, admitted that lawmakers in both the ruling and opposition camps wanted to be able to boast a Greenpia resort in their home district.
But he stressed that top pension bureaucrats are primarily responsible for the massive record-keeping snafu, and they have failed to provide an adequate explanation to lawmakers or to account for how they used the funds on themselves.
The current public distrust over the SIA may eventually lead to a collapse of the public pension system, critics say.
The high ratio of unpaid premiums to the National Pension Fund is a symptom of this woe, said Motofumi Isomura, a visiting professor at Hakodate University in Hokkaido and a pension issue expert.
The unpaid ratio stood at 32.9 percent in fiscal 2005, compared with 15.5 percent in fiscal 1995, the SIA said.
Isomura said the government plan to transform the SIA into a new body and make its employees no longer public servants is a bad idea.
“It will only create more amakudari posts,” he said.