With the public pension system slated for revision next year, the Social Insurance Agency is desperate to restore people’s trust in it.

That is because the system faces being hollowed out due to a sharp rise in the number of pension scheme members paying no premiums.

In February, Shuzo Tsutsumi, director general of the agency, began visiting social insurance offices nationwide to encourage them to redouble their efforts to collect national pension premiums. His actions were highly unusual.

So far, Tsutsumi has visited 29 of the 47 offices and plans to visit the rest by October.

The National Pension Plan is virtually bankrupt, unable to raise the funds necessary to pay pensions on its own due to a large number of insurers paying no premiums.

Of self-employed individuals, those who pay no premiums account for 40 percent, including those exempt from paying premiums. All told, the ratio of people in arrears came to 29 percent in fiscal 2001. The ratio is rising year after year, and nearly half of all people in their 20s pay no premiums.

Because the shortfall of funds for the national pension — the basic pension for the elderly — is covered by some of the contributions to employee pension plans, if the number of delinquents continues to increase, it will not only make pension contributors unable to receive pensions in the future but also result in raising pension premiums to make up for the shortfall.

“Honesty does not pay, if people not paying premiums are left unblamed,” a business leader said.

Amid a rising sense of inequality and concerns about the pension plan’s future, the Social Insurance Agency has begun to consider carrying out compulsory collections.

An agency official said the purpose is to raise people’s understanding of the national pension plan and to boost morale.

The agency plans to resort to the measures after obtaining individual income information, including residence tax data, from municipal governments.

But some people question the wisdom of providing agency personnel with the means to collect a monthly premium of 13,300 yen. Such activities may also run counter to the protection of personal information.

Others argue that the measure would give rise to moral degeneration, as it effectively exempts people with small incomes.

Still others say the ulterior motive behind the agency’s move to strengthen premium collections is to protect itself. This is because both labor and management have begun calling for an overhaul of the premium-collection system.

They argue that to resolve the premium nonpayment problem, the current social insurance system, based on insurance premiums and taxes, should be switched to one based totally on taxes.

A tax-based social insurance system would make clerical work to collect premiums unnecessary, which in turn would lead to the scaling down of the agency.

For the agency, which has 17,500 employees nationwide, such a situation must be avoided.

Mindful of the agency’s situation, the Health, Labor and Welfare Ministry is reluctant to introduce a tax-based system.

“In order to address the nonpayment problem, it is necessary to discuss measures that transcend the administrative turf of each government agency,” said a member of the Council on Social Insurance, an advisory body to the health, labor and welfare minister.

“For example, a study should be conducted on consolidating the Social Insurance Agency, which handles the pension and government health insurance systems, and the National Tax Administration Agency, which handles tax collection,” he said.

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