Business

Employee pension scheme suffers its first deficit

The employee pension scheme unexpectedly registered its first-ever deficit in fiscal 2003, which ended last March, forcing the Social Insurance Agency to tap reserves, the agency said Friday.

The deficit came to 337.9 billion yen, as premium and other income totaled 31.10 trillion yen, against 31.44 trillion yen in benefit payments and other spending, the agency said.

The agency thus had to withdraw 291.3 billion yen from reserves to help cover the deficit, it said.

Premium income fell nearly 1 trillion yen from the previous year due to a decrease in the number of employed workers and pay reductions as a result of corporate restructuring, while pension benefit payments increased by some 500 billion yen amid the aging of the population, an agency official said.

The national pension scheme for self-employed and some other people also posted a deficit in fiscal 2003 for the second consecutive year, the agency said.

The deficit was 50 billion yen, as income totaled 5.77 trillion yen against 5.82 trillion yen in spending, prompting the agency to dip into reserves again, it said.

Japan’s total public pension reserves thus decreased to 147.27 trillion yen, including 137.41 trillion yen for the employee pension scheme and 9.86 trillion yen for the national pension scheme, the agency said.

Although the public pension reform package, enacted in June, is set to raise pension premiums gradually, the agency said the employee pension scheme will continue to post a deficit until fiscal 2009.

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