The Japanese public has expressed anger over the fact that members of the Diet are entitled to such fat pensions. In response, a parliamentary panel has recommended that there be at least a 70-percent increase in premiums and a 30-percent cut in payouts. These proposals probably will take effect in fiscal 2006 if related legislation is approved during the current regular session.
These changes, however, are not likely to win popular support because Diet members' pensions will still seem relatively large. After paying premiums for just 12 years, a legislator can get almost as much as a retired top bureaucrat. A better solution would be to scrap the current pension plan and introduce a new system of retirement allowances.
Under the current system, Diet members who have served for 10 years are guaranteed a retirement pension of at least 4.12 million yen a year. Payouts increase by 80,000 yen for each additional year of service. In fiscal 2003, retired members of the Lower House received about 5.02 million yen on average (from 4.2 million yen to 7.42 million yen). Those who subscribe to other public pension plans, such as the national pension fund, are entitled to additional payments.