Young people are never as carefree as they seem. Each generation has its own secret worries. Among the current generation’s is one their parents and grandparents could afford to be relatively nonchalant about: pensions.
At first glance, it’s odd to see people just starting out in life worrying about post-retirement economic security. But the plain facts are hard to escape. As the ranks of the old swell, the ranks of the young who must support them dwindle. Will pensions become an unaffordable luxury? Is the government competent to manage pensions? Competence aside, is the government to be trusted? The answer to the last two questions, on the evidence so far, is no, and Shukan Post (Feb 1) issues a clear warning: “Your pensions are going down drastically.”
Front page news over the past few weeks only stokes anxiety. For over a decade, it is now plain, the Health, Labor and Welfare Ministry has been calculating unemployment and other benefits based on faulty statistics. As a result, more than 20 million people have been receiving less than their entitlement. To ministry denials that this has anything to do with pensions, Shukan Post retorts, “That cannot be taken at face value.”
The magazine recalls the pension scandal of 12 years ago, in which “careless pension fund management” by the same ministry caused pension payment records pertaining to 50 million people to disappear. That was the end of Prime Minister Shinzo Abe’s first administration. Public outrage toppled it in 2007, tossing him to the political wilderness, where he languished until his remarkable comeback in 2012.
Some 30 million victims of that fiasco were subsequently redressed – leaving 20 million still in limbo. Then and now, “it’s basically the same problem,” says Shukan Post – to wit, a dwindling fund with more and more claims on it.
What can the government do? “Careless” it has certainly been, and investigators are currently probing allegations of document tampering and cover-up. But procedural and moral reform, if even they are possible, can’t solve the core problem of insufficient revenue in the face of a demographic imbalance favoring the elderly at youth’s expense. What can? The only short-term solution in sight as of now is cuts – which takes us back to Shukan Post’s headline.
The magazine’s source on this is Shogo Kitamura, a pension fund analyst known in the field as “Professor Pension.” The cuts he foresees will take various forms, notably taxation of pension benefits that are currently exempt, and, more dramatically, the steady raising of the eligibility age – from 65 at present to 70 almost certainly soon, and to 75 possibly soon after. And then? The life expectancy expands, the birth rate shrinks. Living beyond age 100 is now commonplace. Japan’s centenarian population was 67,824 as of 2017. No wonder young people are worried.© Japan Today