• Kyodo News

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The House of Representatives passed a bill Friday to increase the government’s contribution to the national pension scheme from one-third to one-half in fiscal 2009.

The Lower House sent the bill immediately to the House of Councilors for deliberation.

The Liberal Democratic Party-New Komeito ruling bloc voted for the bill after it was approved earlier in the day by the Health, Labor and Welfare Committee, which is also backed by members of the ruling camp.

But it is unclear whether the bill will expediently clear the Diet because the opposition camp, led by the Democratic Party of Japan, wants to hold a full debate on the bill in the House of Councilors, which the opposition controls.

At present, the government provides one-third of the funds needed to fund the pension scheme, including benefit payouts for all pensioners. The remainder is mainly covered by premiums paid by future pensioners.

The bill supported by the ruling coalition would revise the national pension scheme law to increase the government’s burden to half in fiscal 2009, which began this month.

The ruling bloc is considering tapping surplus reserves sitting in a special account in the government’s fiscal investment and loan program, known as “zaito,” to raise the estimated ¥2.5 trillion per year it thinks will be needed to fund the proposed increase in fiscal 2009 and fiscal 2010.

From fiscal 2011 onward, the state’s contribution would be maintained by dipping into special funding sources that have not yet been determined.

The measure would become permanent, however, if the funding sources are secured through tax reforms, including a hike in the 5 percent consumption tax.

The government and ruling bloc want the bill to be passed quickly. Health, Labor and Welfare Minister Yoichi Masuzoe said the bill is necessary to fulfill the government’s promise to establish a sustainable pension system.

The DPJ is against the proposal and has said it is necessary to fundamentally revise the pension system rather than just increase the state’s premium burden.

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