Well, a timely topic: the Japan Times says that Minshuto wants to have a pension reform proposal in place by May.
I have been following this one, and I’m happy to see that they moved up their timetable on reform (to start this year). The work originally was going to be stretched out over a couple of years. (As in, start in 2012 and implement it in 2014).
I think this has something to do with the fact that, other than a lot of anti-Americanism and nixing one dam, not much change has happened since last September when they got in. Now the voters will be picking Upper House seats in July, and, like, “where did the year go?” That line isn’t working in Washington with America’s own domestic woes, and it certainly won’t work here in Japan.
What will the proposed reform look like? The key paragraph is here:
Under the ruling Democratic Party of Japan’s campaign platform for last summer’s general election, the public pension system would be consolidated into the minimum-guaranteed pension, funded by revenues from the consumption tax, in which everyone would participate regardless of their occupation, and the other in which people at the same income levels would pay equal premiums.
So what would this be then? It sounds like the basic pension would be paid through the consumption tax. They would hike the consumption tax, rather than everyone pay their nenkin coupons at the convenience store. In the long run, that would probably be enough to cover the 70,000 yen a month promised as a minimum pension.
The second leg of it would be a contributory system based on a percentage of income at different wage or income levels. And collected expressly as a tax (so no more nenkin dodging).
The general idea sounds great. The current system doesn’t work.