The Financial Services Agency decided Wednesday it will no longer make reference to a controversial estimate that a retired couple that lives to be 95 years old would need at least ¥20 million in addition to their benefits under the national public pension system.
But an FSA panel agreed the draft report will be kept on the agency’s website as an official document and one of its official proposals, although it had drawn fire before the July Upper House election for casting doubt on the credibility of the pension system.
The paper had been in limbo after Finance Minister Taro Aso, who doubles as the financial services minister, decided not to endorse it in June, saying it runs counter to the government’s official view that the pension system serves as the basis of household finances during post-retirement years.
In an agency panel meeting, Junichi Nakajima, director general of the FSA’s Policy and Markets Bureau, apologized that the estimate has caused “extreme anxiety and misunderstanding among the public.”
He also said, “It continues to be important to create an environment where people can build assets in a stable manner.”
The draft report, which was originally issued on June 3 by a working group of the agency’s panel, was meant to encourage the public to proactively engage in managing and investing their assets in the face of an aging society and a declining workforce.
The public pension system is supported by premiums paid by the current labor force in the country.
But the large amount of “shortfall” pointed out in the paper triggered an outcry, prompting opposition forces to accuse it of undermining the reliability of the country’s pension plan ahead of the House of Councilors election.
Citing an example of a couple in which the man is aged 65 or older and the woman 60 or older, the draft report estimated 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 need an additional ¥13 million, and if they were to live for 30 more years, the shortfall would be ¥20 million, according to the paper, which was compiled based on figures on the average income and expenditures for elderly households.