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Beware, your pension is vanishing

24 Comments
Photo: REUTERS

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

©2019 GPlusMedia Inc.

24 Comments
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I've known for quite some time now that we cannot depend on receiving the proper pension we have been forced to pay into.

8 ( +10 / -2 )

"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."

Shows how short some peoples memories are... 5 years.

11 ( +11 / -0 )

Ah just rev up the Printing presses that seems to have worked out Ok

5 ( +5 / -0 )

Is that all they have to worry about? I suppose my generation were lucky, all we had to be concerned about was the depressingly high probability of being obliterated in a thermonuclear fireball. Probably why most of us never gave a thought to pensions!

-3 ( +1 / -4 )

A non-story. There is a formula to calculate how much you'll receive.

The Japanese govt can give as much as yen as it wants to pensions until inflation becomes a problem. Since the yen is the world's safe haven currency, that ain't gonna happen for a long, long time - if at all.

-8 ( +0 / -8 )

People needn't worry, they just need accept the reality that's in front of them and deal with it.

If yo momma told you you weren't ever gonna have no ice cream ever again, the world would not come to an end.

Pensions were originally a scheme to help the needy, and that's what they should become, once again. The more people accept this, the sooner the system can be more rapidly reformed to represent the reality.

-7 ( +1 / -8 )

Beware, your pension is vanishing

Speak for yourself. I'm taking the wife and kids to Canada.

But ANYWAY..That's what happens when you

have no immigration

try to force women to make a choice between children and a career

don't pay a living wage so people feel that they can't afford children

don't have enough safety nets for the public

have extremely long working hours that people are too exhausted and don't have time to make babies, much less find a spouse in the first place if they are single

Japan- you made your bed. Now sleep in it.

5 ( +9 / -4 )

The full amount as it is now is a pittance. God knows how people get by with a Japanese state pension.

4 ( +4 / -0 )

Beware, your pension is vanishing

Speak for yourself. I'm taking the wife and kids to Canada.

Exactly! I plan on living on a very warm beach in a country that is way more affordable. Plus, two pensions are better than one.

4 ( +5 / -1 )

@Aly Rustom

"I'm taking the wife and kids to Canada....That's what happens when you have no immigration.

Canada, which has the highest rate of immigration in the OECD, will be raising the eligibility age for OAS from 65 to 67. On a related note, surgery wait times in Canada have quadrupled since 2012.

The belief that mass immigration helps or fixes social security systems is one of the biggest myths of our times. From listening to my friends and family there, "open-door Canada" is suffering much more severe social-security strains than Japan.

1 ( +3 / -2 )

Canada, which has the highest rate of immigration in the OECD, will be raising the eligibility age for OAS from 65 to 67.

At least we'll still get it.

On a related note, surgery wait times in Canada have quadrupled since 2012.

Listen- A large proportion of my family are doctors, dentists and nurses. My mom last year was treated for lung and pancreatic cancer for free and she is recovering well. I'll happily take the canadian health care system ANY day over the American or the Japanese one for that matter.

The belief that mass immigration helps or fixes social security systems is one of the biggest myths of our times. 

Canada has one of the highest standards of living in the world. Much higher than Japan.

From listening to my friends and family there, "open-door Canada" is suffering much more severe social-security strains than Japan.

That's ridiculous. The canadians get ALOT more in social security than the pensioners here in Japan. I would suggest going to Canada and checking it out yourself instead of listening to friends and family there and making some claims that just sound plain silly to anyone who has lived there.

At any rate Jeff, it seems that you think Japan is better than Canada. That's fine. You would probably not feel at home over there. I do. I happen to think Canada is a MUCH better place to live and raise kids than the US or Japan. To each his own.

2 ( +4 / -2 )

These countries have the highest quality of life

2. Canada — 89.49.

For such a huge nation, Canada only has 35 million citizens, and they are some of the best looked after in the world. Canada's healthcare is what stands it above the rest. Education and opportunity in the country are also impressively strong.

1. Finland — 90.09.

https://www.weforum.org/agenda/2016/07/these-countries-have-the-highest-quality-of-life

0 ( +3 / -3 )

Back on topic please.

@Aly Rustom

"That's ridiculous. The canadians get ALOT more in social security than the pensioners here in Japan."

The basic OAS amount is C$586.66 per month in Canada. My Japanese nenkin so far is about 44,000 yen, and I've got many more years of contributions before retirement, raising it higher, since it's contribution based. My Kosei Nenkin will be a higher amount than that.

At least we'll still get it.

Let's talk facts, not speculation. The fact is, Canadians are the ones who won't "get it," ie, those lost two years. All that immigration couldn't prevent that from happening, eh?

1 ( +3 / -2 )

The basic OAS amount is C$586.66 per month in Canada. My Japanese nenkin so far is about 44,000 yen, and I've got many more years of contributions before retirement, raising it higher, since it's contribution based. My Kosei Nenkin will be a higher amount than that.

Yeah. Just because YOU get a higher nenkin than most doesn't mean that the average Japanese will as well. You know as well as I that nenkin has alot to do with how much you put into it and for how many years. Your agrument doesn't hold water.

Let's talk facts, not speculation.

We are talking about this article which says that the Japanese pension is vanishing.

The fact is, Canadians are the ones who won't "get it," ie, those lost two years. All that immigration couldn't prevent that from happening, eh?

Actually, I have family in Canada and they all are getting their pensions. Like I said, go there and check your facts before you make these baseless arguments.

0 ( +1 / -1 )

How does Canada’s public pension system measure up globally?

The Mercer Melbourne Global Pension Index ranks Canada’s retirement income system seventh out of 25 countries.

CANADA

How does it work? Canada’s public pension system offers a flat-rate benefit that can be topped up with an income-tested benefit (the guaranteed income supplement) and earnings-related public schemes (the Canada Pension Plan and the Quebec Pension Plan).

Read: Why OAS needs a makeover

Age of eligibility: Under the former Conservative government, the age of eligibility for the basic OAS pension was to gradually increase to age 67, starting in April 2023, but Prime Minister Justin Trudeau’s first federal budget confirmed it would restore it to 65. For the Canada Pension Plan, the normal eligibility age is 65, but people can take an early pension from age 60 or a late one up to age 70.

Benefit calculation: Based on April to June 2016 monthly rates, the maximum annual OAS pension benefit for an individual is $6,846.24. The maximum annual GIS benefit is currently $9,283.20 (the amount will increase on July 1 to $10,230.20). So a single senior with no income outside of OAS and GIS benefits (such as CPP) would receive a combined $16,129.44 under the current amounts.

The maximum CPP payment amount for 2016 is $13,110. According to Finance Canada, it’s possible for an individual with the maximum CPP benefit to qualify for GIS payments as well. A senior could receive OAS, GIS and CPP benefits, but it’s not possible to receive the maximum of each of them since higher CPP payments directly reduce GIS amounts.

JAPAN 

How does it work? The public pension system has two tiers: a basic, flat-rate scheme and an earnings-related plan.

Age of eligibility: The pension age for the basic scheme is 65, with a minimum of 25 years of contributions. From April 1, 2017, it will require a minimum of 10 years of contributions. The earnings-related pension age is increasing to 65 from 60 between 2013 and 2025 for men and between 2018 and 2030 for women.

Benefit calculation: The full annual basic pension benefit in 2016 is equal to 780,100 yen ($9,283.64). The earnings-related pension benefit depends on both remuneration and the length of contributions.

* This summary is from the OECD report only

https://www.benefitscanada.com/pensions/governance-law/how-does-canadas-public-pension-system-measure-up-globally-82162

-1 ( +0 / -1 )

Another mistake of yours Jeff:

Canada, which has the highest rate of immigration in the OECD, will be raising the eligibility age for OAS from 65 to 67. On a related note, surgery wait times in Canada have quadrupled since 2012.

If you had done your homework, you would know

Age of eligibility: Under the former Conservative government, the age of eligibility for the basic OAS pension was to gradually increase to age 67, starting in April 2023, but Prime Minister Justin Trudeau’s first federal budget confirmed it would restore it to 65. For the Canada Pension Plan, the normal eligibility age is 65, but people can take an early pension from age 60 or a late one up to age 70.

https://www.benefitscanada.com/pensions/governance-law/how-does-canadas-public-pension-system-measure-up-globally-82162

-1 ( +0 / -1 )

Canada:

So a single senior with no income outside of OAS and GIS benefits (such as CPP) would receive a combined $16,129.44 under the current amounts.

Japan:

The full annual basic pension benefit in 2016 is equal to 780,100 yen ($9,283.64). The earnings-related pension benefit depends on both remuneration and the length of contributions.

So Canada is nearly double that of Japan's. And THAT'S IF Japan ends up paying it out at all- which this article says may not.

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.

When something like that happens in Canada, then we'll talk..

0 ( +0 / -0 )

Readers, please keep the discussion focused on Japan's pension system.

@Aly Rustom

Just because YOU get a higher nenkin than most doesn't mean that the average Japanese will as well. 

In terms of nenkin contributions, I am somewhat under average, with plenty of missed months.

We are talking about this article which says that the Japanese pension is vanishing.

This article, from a tabloid, is based on speculation, and as I pointed out earlier, it is also based on an erroneous assumption.

Actually, I have family in Canada and they all are getting their pensions

Yes, the older generation. Same with Japan. A Japanese work colleague says her father is getting around 300,000 - 400,000 yen a month on pensions.

the maximum annual OAS pension benefit for an individual is $6,846.24.

And the Japanese equivalent, kokumin nenkin, pays 780,000 yen after the maximum 40 years -- a higher amount than Canada’s. Do your homework.

So Canada is nearly double that of Japan's

No it isn’t, because you’re adding GIS on top of the OAS, available only to low income people. Do you expect to be officially poor when you repatriate with your wife and kids?

When something like that happens in Canada, then we'll talk..

That’s not really the point. Your premise is that Canada’s social security is a whole lot letter than Japans. The actual numbers clearly disprove that, although both are under strain. Youre right, Trudeau recently rescinded the 67 eligibility. Congratulations, Canada's future system will be on par with Japan's -- unless the conservatives are voted back in power.

0 ( +0 / -0 )

This article, from a tabloid, is based on speculation, and as I pointed out earlier, it is also based on an erroneous assumption.

Considering that the pensions

Actually, I have family in Canada and they all are getting their pensions

Yes, the older generation. Same with Japan. A Japanese work colleague says her father is getting around 300,000 - 400,000 yen a month on pensions.

And you think that her father is an accurate representation of the system??? really?? OK...

the maximum annual OAS pension benefit for an individual is $6,846.24.

And the Japanese equivalent, kokumin nenkin, pays 780,000 yen after the maximum 40 years -- a higher amount than Canada’s. Do your homework.

IF you've paid into it for 40 years where MOST people today haven't because they are not on full contract agreements. Again, your argument doesn't hold water.

So Canada is nearly double that of Japan's

No it isn’t, because you’re adding GIS on top of the OAS, available only to low income people. Do you expect to be officially poor when you repatriate with your wife and kids?

No. But it shows that its alot better to be poor in Canada than Japan.

When something like that happens in Canada, then we'll talk..

That’s not really the point.

the pensions vanished. this article talks about pensions vanishing. How can that not be the point??

Your premise is that Canada’s social security is a whole lot letter than Japans. The actual numbers clearly disprove that, although both are under strain.

No they don't. Did you not read the part where it says that The Mercer Melbourne Global Pension Index ranks Canada’s retirement income system seventh out of 25 countries?

Where does Japan rank? Again, do your homework.

0 ( +0 / -0 )

Readers, please keep the discussion focused on Japan's pension system.

Readers, please keep the discussed focused on Japan's pension system.

Sorry forgot this:

This article, from a tabloid, is based on speculation, and as I pointed out earlier, it is also based on an erroneous assumption.

Its not an erroneous assumption considering

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

people's pensions have already disappeared.

0 ( +0 / -0 )

Your premise is that Canada’s social security is a whole lot letter than Japans. The actual numbers clearly disprove that,

let's see: according to The Mercer Melbourne Global Pension Index

Canada's ranking is a B.

https://australiancentre.com.au/wp-content/uploads/2018/10/Canada-2018.pdf

Here's Japan's ranking- it gets a D

https://australiancentre.com.au/wp-content/uploads/2018/10/Japan-2018.pdf

0 ( +0 / -0 )

All I know is that I don’t expect a pension from any country and I don’t need one, as I have steadily built up my wealth and investments over my working life-I would advise all to attempt the same....

0 ( +0 / -0 )

Maybe we should understand the word ‘government’ in more detail?

Thus, it is the responsibility of us all NOT to rely on promises made by those in control of us and rely more on ourselves.....

0 ( +0 / -0 )

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