The government effectively withdrew Tuesday a recent report that casts doubt on the ability of the public pension system to sustain people’s livelihoods in the face of a rapidly aging society, in an apparent bid to assuage voter concerns ahead of a national election.
Finance Minister Taro Aso, who is also responsible for the Financial Services Agency, indicated he would not accept the report by an agency panel, saying its premise “has caused extreme worries and misunderstanding and runs counter to the government’s existing policy.”
“The public pension plan will never collapse,” said Aso, who also serves as deputy prime minister. The move was in response to the ruling parties’ demand for the withdrawal of the report in the run-up to the House of Councilors election slated for next month.
The report has sparked controversy and drawn fire from both the ruling and opposition parties since it was unveiled earlier this month. It estimates that a couple who will live to be 95 years old need at least ¥20 million ($184,000) in assets to make up for a shortfall that would be incurred if they were to solely rely on pension benefits to cover living expenses after retirement.
According to one government estimate, 1 in 4 Japanese who are currently 60 will live until 95.
The paper, therefore, called on the public to take greater charge of planning for their retirement by proactively managing and investing their assets.
The 78-year-old finance minister said while the government maintains the pension system is meant to cover “to some extent” the livelihoods of the elderly, though not fully, the report gave an impression that the plan cannot even achieve that goal under current policy.
Citing an example of a couple with a man aged 65 or older and a woman 60 or older, the report said they would face a monthly shortfall of ¥50,000 if they depended only on their pensions. If the couple were to live for 20 more years, they would be short by ¥13 million, and if they were to live for 30 more years, they would be short by ¥20 million, according to the paper, which based its figures on the average income and expenditures for elderly households.
Earlier in the day, Toshihiro Nikai, secretary general of the ruling Liberal Democratic Party, told reporters he is “extremely concerned as only the story of a ¥20 million deficit has been highlighted.”
“We have to be careful not to upset our party’s candidates before the Upper House election,” Nikai also said.
Prime Minister Shinzo Abe also apologized Monday, saying expressions used in the report were “inaccurate and misleading,” during a meeting of the Audit Committee of the House of Councilors.
“The report gave a false impression by saying that an elderly couple household usually suffers a deficit of ¥50,000 monthly,” he said.
As lifestyles vary among elderly people, so do their living standards, working practices and asset situations, he added.
Kohei Otsuka, acting head of the Democratic Party for the People, said Monday that concerns over the public pension system are increasing.
Abe replied that the current design of the pension system is meant to provide relief to current and future generations.