TOKYO, Jun 13 (News On Japan) - The Pension System Reform Law was passed and enacted at the Upper House plenary session on June 13th with majority support from the Liberal Democratic Party, Komeito, the Constitutional Democratic Party and others.
The law includes measures to expand the coverage of employee pensions by removing the so-called 1.06 million yen income barrier, revising the in-service old-age pension system that reduces pension benefits for working seniors, and raising the cap on employee pension insurance premiums for high-income earners.
Additionally, a provision initially excluded from the government proposal to strengthen the basic pension was reinstated during deliberations in the Lower House and added as a supplementary provision.
This measure is intended to prevent people such as the so-called employment ice age generation from falling into low pensions or public assistance. If the next pension system financial review scheduled in four years projects a decline in the basic pension payment level, reserves from the employee pension fund will be used to support the basic pension level for the future.
However, if this provision is triggered, it is estimated that the government will need about 2 trillion yen annually in roughly 30 years to cover half of the additional basic pension funding, which would be paid from the national treasury. Both Nippon Ishin and the Democratic Party for the People opposed the bill in the vote, criticizing the lack of clarity on how this funding would be secured.
Source: FNN
