The Social Insurance Agency, which has been accused of corruption and criticized for wasteful use of pension-insurance premiums, has announced a set of countermeasures aimed at reforming itself through its own efforts. However, many of the measures are presumed to have been enforceable within the existing system. So it is understandable if insurance subscribers feel like saying they are fed up with all the verbosity and demand action.
The program, announced last week, consists of four main pillars: increasing the ratio of paid national pension premiums, improving over-the-counter services, eliminating wasteful use of the budget, and organizational reform. These are all measures that should be implemented immediately because that will reduce the public’s growing uncertainty about the pension system and distrust of the government.
The most important goal is to raise the ratio of paid national pension premiums. The national pension is the first stage of employees’ and other public pensions. If the national pension scheme were to collapse, the whole pension system could come tumbling down.
Last fiscal year the ratio of paid premiums was 63.4 percent. This was a slight improvement from the 62.8 percent in fiscal 2002, which was the worst figure ever, but it still means that nearly 40 percent of subscribers are not paying their premiums. If this happened in private-sector insurance, the scheme would go bankrupt or be dissolved.
The program’s target of raising the ratio to 80 percent in three years’ time is a tough one. Since the challenge involves restoring the public’s trust in the pension system, efforts to achieve the goal must not be allowed to fizzle out. Yet, specific measures to attain the 80 percent target lack originality. The program mentions enabling people to pay premiums at convenience stores or by bank transfer, and enforcing compulsory collection (asset seizure) from the 30,000 malicious delinquents. But these measures have been in effect all along. The problem is simply that the SIA so far has not been tackling the issue with sufficient zeal.
In the last few years the media have been harping about the hollowing out of not only the national pension but also the employees’ pension plan. The SIA bears a heavy responsibility in this respect because it has neglected to go after companies that have avoided the system even though they are legally obliged to subscribe.
Enforcement of compulsory application is a natural step, so calling it a “new measure” is misleading. The social-security system depends on mutual support among the public. When premiums go unpaid for no adequate reason, whether by companies or individuals, the very survival of the system is put at risk unless there is coercive action to seize assets or wages.
Nor is the elimination of wasteful uses of the budget an extraordinary step. Incidents of wasteful use include not only the construction of staff accommodations and the purchases of automobiles but also the payment of membership dues for an association of people from the same prefecture, and the payment of golf course fees. Such uses not only reflect a problem of lax morals; they are equivalent to malicious and organized criminal acts.
The SIA announced that insurance premiums will not be used for any other purpose than pension benefits and necessary expenses. This, again, states an obvious objective! The abolition and transfer of pension-welfare facilities, into which “parachuting” (the appointment of former bureaucrats to top posts) is rampant, is a natural step, too. The SIA should strive for their complete abolition.
Within the government, as one idea for the reform of the SIA, there has been talk about moving the agency to the private sector, say, by turning it into an independent administrative institution. Recently the Council for Regulatory Reform attracted attention with a proposal to submit the work of the agency to competitive bidding in the public and private sectors.
However, some problems could follow — such as the leakage of personal information — in entrusting work involving the benefits and burdens of the national pension, employees’ pension, government-administered health insurance and so forth to the private sector. A better approach would be to have the SIA take advantage of the efficient knowhow of private companies.
The work of the SIA is closely connected with the postretirement lives and health of the nation. The employees of the agency, who number about 17,000, have an extremely heavy responsibility in this respect. Organizational reform begins with a change in attitudes among the staff.
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