Welfare minister Chikara Sakaguchi said Friday he opposes cutting national pension payments equivalent to price falls over the past three years if the government lifts its freeze on linking price fluctuations to pension benefits.
"We should not cut them in a retroactive manner. We can never accept it," Sakaguchi, minister of health, labor and welfare, told a news conference.
But he said he may accept some cuts in pension payments if the salaries of government employees are also cut.
"If the salaries of public servants are reduced, then we may have to ask pensioners to bear the same burden," Sakaguchi said.
The Finance Ministry has been leaning on the welfare ministry to lift the fluctuation-benefits freeze in fiscal 2003 and cut pension payments by an amount equivalent to price falls of 1.7 percent seen during the past three years, plus another fall of 0.6 percent estimated for the current fiscal year.
The government froze the linkage in fiscal 2000 as the economy was deteriorating, fearing cutting pensions to reflect lower prices would make matters even worse.
The system of linking pensions to price fluctuations was introduced in 1973 to cope with rising prices.