The Cabinet approved a long-postponed bill for reforming the pension system on Friday, two months behind schedule, following lengthy internal discussions and fierce resistance from within the ruling Liberal Democratic Party.
The trajectory of the bill — slated to enter parliamentary deliberations next week — reveals the hurdles faced by the minority government of Prime Minister Shigeru Ishiba in passing legislation without a majority in the Lower House and a strong political leadership.
The bill includes an expansion of the kōsei nenkin employee pension program to cover part-time workers earning less than ¥1.06 million ($7,300) yearly and those working for companies with fewer than 51 employees. Such workers currently only benefit from a basic pension program providing universal coverage called kiso nenkin.
The bill also boosts support for employees 65 and older and a review of the criteria used to calculate insurance premiums.
“The plan includes measures to increase pensions for current recipients while also enhancing benefits for future recipients,” Chief Cabinet Secretary Yoshimasa Hayashi told reporters Friday.
To fund the basic kiso nenkin program, the government initially planned to use resources from the kōsei nenkin program, which those in stable employment or working for larger companies make contributions to.
But that plan sparked a backlash from the LDP’s Upper House caucus, which has raised concerns that such a move would affect future pensions and cost them votes in an upcoming summer election. As a result, the proposal has been scrapped, and put off until the next amendment of the pension law, scheduled for 2029.
”Some in the party suggested we take more time to discuss the bill,” Norihisa Tamura, a two-time health minister and chair of an LDP panel on social security, told a TV program Thursday.
Questioned in parliament Monday, health minister Takamaro Fukuoka admitted that the proposal surrounding the funding of the basic program faced some resistance during the party’s internal discussions. That had led to the delay in the submission of the bill.
Ishiba, himself, has admitted that people entering retirement age in the upcoming decades will see their pensions significantly curtailed under the current system due to the growing imbalance between retirees and the working population.
The opposition has criticized the bill, arguing that it fails to provide an adequate safety net for what are called the employment ice age generation — a group of people who struggled to secure stable employment due to a significant economic downturn in the 1990s and early 2000s.
“They’re running away from this,” Democratic Party for the People leader Yuichiro Tamaki told a news conference Tuesday. “If this is the case, that’s going to become a point of contention in the Upper House election.”
Meanwhile, the Constitutional Democratic Party of Japan hinted that it might put forward an amendment and cooperate with the government to approve the bill in the current session of parliament. The LDP is aiming to get the bill passed by the Lower House before the end of May.
The pension system is traditionally handled carefully by the government, especially ahead of elections.
In 2007, during former Prime Minister Shinzo Abe’s first stint as head of government, a scandal involving the muddling of data for over 50 million premium payments hit the government months before an Upper House election. The LDP-Komeito bloc went on to lose its majority in the Upper House in that election.
The slow-moving pension bill adds to a similar lack of progress on other debate topics, including rules on political funding and separate surnames for married couples, originally judged as the highlights of the current session of parliament.
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