The Social Insurance Agency (SIA), criticized for its shoddy handling of pension-related records, has been reinvented as the Japan Pension Service, a corporation with semi-governmental status. It is hoped that workers of the new body will do their best to restore people’s trust in the nation’s pension system.

Of JPS’ 23,000 workers, some 10,800 are full-time. About 1,100 of the latter are from the private sector; the rest are from SIA, which was an extra-ministerial body of the welfare ministry.

Upon SIA’s change of status, the government dismissed 525 of the agency’s workers. Many of these workers had in the past been subjected to disciplinary action at SIA, while others had no such record. Some of the former group may file lawsuits complaining that they have suffered “double discipline.” If the dismissed workers seek new jobs, the government should offer assistance.

SIA comprised high-ranking officials from the welfare ministry, workers employed by the SIA head office, and others hired by SIA’s local offices. JPS has abolished this system, which hampered smooth communication within SIA. Workers’ wages will be tied to assessments of their work performance.

The new body’s task is enormous. About three years ago, it surfaced that the sources of pension-premium payments connected to some 50 million records could not be identified. More than 20 million records still are in need of clarification. Funding in the fiscal 2010 budget for dealing with the matter was slashed from the requested ¥177.9 billion to ¥91 billion.

The new body also must improve the premium collection rate for the kokumin nenkin (national) pension system, which is mainly for self-employed and jobless people. In fiscal 2008, the premium-payment rate dipped to a record low of 62.1 percent.

The Democratic Party of Japan’s election manifesto called for integration of SIA and the National Tax Administration Agency, meaning JPS’ position is shaky. The government should quickly spell out its plans for the integration and overall pension reform.

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