The Ministry of Health, Labor and Welfare has decided to eventually abolish the pension substitution system in which employee pension funds manage a portion of public pensions on behalf of the government, due to a snowballing shortfall in reserves set aside for public pension liabilities.

Under the system, there are many employee pension funds that do not have enough reserves to cover the public pension component they substitute. In order to pave the way for the dissolution of cash-strapped employee pension funds and the subsequent abolition of the pension substitution system altogether, the welfare ministry intends to make up for the reserve shortfalls with funds from the government's welfare pension program. The plan could come under fire, but the ministry judged that it would be better than having the entire welfare pension program gravely affected by maintaining the employee pension fund system.