The premium payment rate for Kokumin Nenkin (national pension) — a public pension system for self-employed people, part-time workers, jobless people, etc. — fell to a record 62.1 percent in fiscal 2008. The situation suggests that modifications should be made to the plan under which the Social Insurance Agency will be abolished and taken over by a new entity in January 2010.

The premium payment rate is derived by dividing the number of months in which pension system participants actually paid premiums by the number of months in which they were supposed to pay premiums. The rate started to fall from the peak of 85.7 percent in fiscal 1992 and hit a low of 62.8 percent in fiscal 2002. Although the rate was 63.9 percent in fiscal 2007, it fell to a new low the next year. Since the government's target is 80 percent, the situation should be considered serious.

People in their late 50s showed the highest payment rate of 75.1 percent while people in their late 20s showed the lowest payment rate of 49.4 percent. If this trend continues, pension benefits could dwindle and the number of people without pension entitlement could swell.

Apparently the worsening employment situation is contributing to the lower rate for paying premiums. According to the SIA, the fact that 65 percent of premium collection workers must devote their time to sorting out some 50 million hard-to-identify premium payment records is a factor contributing to the lower rate.

It is important to persuade individual participants to pay premiums or go through the official procedure exempting them from making payments if they don't have the financial means to do so. The procedure keeps such people eligible for receiving at least a reduced pension. Experienced social insurance workers are needed to help bring about a higher premium payment rate.

The new pension entity will have 20 percent fewer workers than the SIA. The number will be further slashed by another 20 percent in the future. The political parties should seriously consider ways to increase the pension premium payment compliance rate.