Tepco eyes 30% cut in pensions to help pay nuke compensation

Kyodo

Tokyo Electric Power Co. is considering implementing a 30 percent cut in corporate pensions for retirees aged 80 or older to help with the massive compensation payments it has to make over the Fukushima nuclear disaster, a newly compiled emergency business plan showed Thursday.

Tepco would be required to reduce costs by more than ¥2.5 trillion over 10 years under the plan, which it devised with the government-backed Nuclear Damage Compensation Facilitation Corp.

The plan is expected to be submitted to Minister of Economy, Trade and Industry Yukio Edano by the end of this month, sources said.

Tepco and the compensation body are hoping to gain government approval for the plan in early November to secure financial aid from the government and speed up the compensation process.

Under the plan, Tepco is expected to ask the government to provide more than ¥800 billion in fresh aid, thereby planning to meet its immediate compensation needs with funds totaling nearly ¥1 trillion, which will consist of the new aid and ¥120 billion in regular government nuclear-accident compensation.

Tepco would need an estimated ¥4.5 trillion for compensation payments through March 2013.

The plan calls for a reduction of around ¥240 billion in Tepco’s costs by the end of the current business year through March as part of restructuring.

It also envisions reducing the promised minimum yield on corporate pensions to 1.5 percent from 2.0 percent for retirees aged between 65 and 79. In doing so, Tepco is hoping to save more than ¥100 billion over 10 years, but it needs to secure the consent of a labor union and two-thirds of its retirees or more to implement the changes.

Tepco will compile a road map detailing the schedule for restructuring and how it will be implemented.