Tokyo, Sept. 23 (Jiji Press)–Reform of Japan’s pension system surfaced as a key issue in the leadership election of Japan’s ruling Liberal Democratic Party after administrative reform minister Taro Kono, one of the four candidates for LDP president, made a bold reform proposal.
Kono called for creating a guaranteed minimum portion of public pension that is completely funded by tax revenues instead of premiums. While a major tax increase is believed to be necessary to implement this reform plan, Kono has not made specific explanations about financial resources.
The other three candidates–former LDP Policy Research Council Chairman Fumio Kishida, former internal affairs minister Sanae Takaichi and LDP Executive Acting Secretary-General Seiko Noda–indicated a skeptical attitude toward Kono’s proposal.
Japan’s current public pension system is made up of two programs–the “kokumin nenkin” program, chiefly for the self-employed, and the “kosei nenkin” program, mainly for corporate employees. Half of the kokumin nenkin program is financed by tax revenues and the other half by premiums.
Under the current system, low-income people who are exempt from paying premiums have the amount of pensions they can receive in the future reduced. “A stable pension system is meaningless if people cannot receive enough pensions to live on,” Kono said, proposing the introduction of the system that guarantees a minimum pension payment regardless of the amount of contributions made.