Gov't council says pensions inadequate in aging society

The Japanese banking system is ill prepared to support the pensioners or anyone setting up any type of retirement accounts that actually PAY any interest that could be lived on.

Regular savings accounts pay next to nothing, the stock market is not the way to go for private investors, going though brokers costs money, and the elderly are prime targets for scammers, and lord only knows what else.

It's once again, the government is saying things without any concrete or SAFE plans to support the people!

In recent years, retirement money for those with college degrees averaged around 20 million yen, a drop by 30 to 40 percent from its peak.

This is the "taishoku kin" or retirement money that businesses and corporations, along with koumuin, get paid upon retirement. Basically the individual gets half as a payout, and the other half is held and paid out in monthly installments.

However, this is TOTALLY misleading, as it ONLY accounts for those who actually GET the money, with more and more businesses hiring contracted workers, they no longer are obligated to pay out the taishoku kin, and the money the government will have to "find" to support the elderly is the rationale behind this.

Grossly Irresponsible.

Where is the outrage. What is it going to take.?

Completely agree with Yubaru. The banking system here is incompetent to the point that people are charged for using their own bank's ATMs "after hours" and online banking is not the norm.

I have a superannuation fund I've been paying into for over 30 years and it will pay me handsomely when I retire in a decade or so. This is why I've been fighting to dodge the Japanese pension scam for the 20 odd years I've been living here. As a foreigner, I'll be lucky to see one-third of the money I've been made to pay into the scam. The pension system is not set up as an investment. It is so poorly set up that the J-Gov has recently decided to gamble the funds in the international stock market. I have no doubt this report will result in an increase in premiums and changes to the payment legislation to make everybody pay more. They'll set it up like NHK and make it impossible for anybody to dodge and start sending contract scalpers to your door to collect payments.

“So, we need to increase the consumer tax to 10% in October, people will work until 70 from summer 2020, increase consumer tax to 15% from October 2020. Also, all ministers will get a raise of 50% for outstanding performance”.

Such news means more "grist to the mill" for Financial Advisers and their cronys in the Banking and Insurance industries. They are the ones who reap the benefits.

To start they can ......

Government has to stop gambling the pension funds away with risky investments.

Stop paying pensions to those who have passed on.

Stop giving retired politicians 700,000JPY per month in pension payouts.

The pension system is especially unfair to widows like me. The survivor's pension is bigger than my own pension. Hence, in accordance to the law, I'm receiving only the survivor's pension and my own is forfeited. It's bigger per se but how can you survive decently with less than 10 man a month? And even if they've added my own, it won't even add up to 10 man. Where is justice? So you still see some old people still toiling past 65!

Government has to stop gambling the pension funds away with risky investments.

It started when Abe took over. Unfortunately the media has called him out on the massive losses.

As Yubaru states, the model case they will be using will be a salaryman with a fully-paid in shakai hoken pension, a wife who was a dependent the whole time, and maybe golden handshake taishokukin (referenced in the story as "retirement money") for the man as well. It will be a small and decreasing proportion of cases.

In Japan, 70% do not get whatever you may hear the "average salary" is. It is bumped upward by high earners. The median, the most half the people get, is always much less. With pensions and savings entering old age, the difference between elite company workers, public employees, etc. and the rest will be huge. The "average" is pretty much meaningless.

The government needs to go for the no-brainer solution: raise bi-monthly pension pay outs for those on low pensions and help retirees without a pension so that they can still participate as consumers in Japan's capitalist economy which like the little red shoes must keep on dancing or else...

For those of you who don't already know, the u.s. and Japan amongst other countries, have an international agreement concerning pension totals. In short, you can't get a full pension from the United States and a full pension from Japan. I qualify for Social Security pension from the US. But I found out after paying into the Japanese pension for a few years, that once I start receiving the Japanese pension my us Social Security payments will decrease. Haven't figured out how much they will decrease by but I can't see paying for full Japanese pension that, in effect, I won't receive.

Never mind the old folk now they will at least get something..

I knew a long time ago people my age, and not just in Japan, will end up paying for the elderly around us while having almost no hope of retirement myself.

If you are under 55 or so unless you have your own plans and savings its very likely you be working till you die..

So I wouldn't say its a scam but certainly Im paying large amounts into a system I almost certainly won't benefit from.

Anyone out there know more about this than I do, please share.

The unwarranted assumption is that all people are able to govern themselves.

@Us, those people who are retirees with no pension most probably are getting welfare from the govt maybe even before their 60's. Maybe you mean the homeless. Not all homeless are without pension. They are receiving but perhaps not enough to rent an apt or there are personal and varied reasons why they are so. The most unfair thing is, there are people esp those who are born normal (Imean those who have the normal faculties and can possibly work for their living) yet along the way couldn't provide for themselves and receive welfare from the govt way higher than what a normal retiree is receiving. Imagine receiving something like 10 to 15 man a month. While those who toiled all their lives are receiving around 8 man only or even less! Where is justice really!!!

It's pretty easy nowadays. Put 60% of your savings in a low-cost S&P 500 ETF and the rest in a low-cost bond ETF. Putting 10-20% of your savings in that for 20 years will give you tons of money by age 65, more than you'll need. All the banks can set this up for you for basically free.

Avoid financial advisers and actively managed funds, which will take a big chunk of your returns.

I’m not paying into the system. It’s obviously a waste. Articles like this one will become increasingly common. The pension system will fail.

Government pension system today has many problems but it has a good thing too. Government pension can cope with inflation while civilian insurance or pension companies cannot.

but in America......

The Social Security’ has $32 trillion shortfall

and Canada Pension Plan is undefended(no money).

I will take Japan's system any day.

I have a friend whose husband, a lifelong NTT employ, gambled away his taishokukin on currency swaps - he lost it all. She's had to resort to working at a convenience store. And they were relatively sophisticated. It's a jungle out their, friends. Be conservative and safe.

Third biggest, used to be second, until recently economy in the world and "Suprise" it can't even manage to supply a living wage to those same people who sacrificed their adulthood making it so. Now that's a fair and equatable outcome.

"for the 20 odd years I've been living here."

So you have lived in Japan for 20 years and bashing it ever since?

LOL how typical

@Disillusioned

I assume you are Australian then? I have been meaning to start paying into my Australian super fund (on top of the kousei nenkin that i am paying here). Where did you go to get advice on this matter? I was hoping to speak to an accountant in Australia, but then they wouldnt know about the Japanese laws/systems. Similarly the accountants here wouldnt know about Australian laws/processes. Plus every accountant i have contacted here seems to cater to ultra rich expats, asking for 300-500k for consultation.

The future looks gloom fur us future pensioners, my current pension will pay out 25000 yen a month when I retire. I guess I will be working until I die.

The future looks gloom fur us future pensioners, my current pension will pay out 25000 yen a month when I retire. I guess I will be working until I die.

If you will get a job in your sixties not to talk in your seventies.

So living on 20,000,000 yen for 30 years? That is 55,000 yen a month. Can't live on that here in Shinjuku. Or anywhere maybe. Especially if Abe gets is inflation wish.

It's pretty easy nowadays. Put 60% of your savings in a low-cost S&P 500 ETF and the rest in a low-cost bond ETF. Putting 10-20% of your savings in that for 20 years will give you tons of money by age 65, more than you'll need. All the banks can set this up for you for basically free.

Avoid financial advisers and actively managed funds, which will take a big chunk of your returns.

Why is it people automatically assume the world is centered on the USA?

You put away 20% of your savings here in Japan, even for 20 years, you are probably going to have roughly the same 20% you put in all along, with nothing extra!

Kind of hard for people here to put that much away monthly, particularly with a family. When one only makes 200,000 to 300,000 a month, that 20% is HUGE!

It therefore called on the public to take greater charge of their finances to plan for their retirement by proactively managing and investing their assets.

I've been doing this for the past 2 decades here, and telling the govt to proverbially shove their pension scheme up their rear ends!

It's a total scam, as is most of the financial system here. My ex wife lost her pension in the early 2000's along with 60+million others, after the government conveniently "lost" them. She was told to simply start again and forced to pay extra to "make up for the loss". Sadly, she refused to fight back and did just that.

This entire government is corrupt to the core and totally incompetent.

I get the outrage but let’s be honest, anyone who thinks their government is going to give them a lovely pension plan for the rest of their life needs a wake up call. I started doing personal investments when I got my first real job at 22 because even back then I was smart to know there is no way in heck a government pension would be enough to survive on.

Japan has the added “opt out” type issue as well. All those contract workers? Though legally supposed to, many aren’t paying. Pension, along with healthcare, should be taken out if paychecks of all. None of the numbers game that goes in here. And let’s not forget all the dependents who haven’t personally paid into the system in decades but who get a cut. How does that make sense? The system is collapsing and yet people not contributing get a cut? “They raised their kids” some will cry. Yes, but so do working parents.

The system needs to be redone but you know it won’t be because greedy rich folks will not agree to it and non-working, non paying dependents won’t agree to it. Do yourselves a favor and invest abroad and get your hard earned money out of Japan.

I was probably one of the lucky ones, but my pension only covers three fifths of my rent and living expenses, so we have had to cut back radically on everything. The retirement money package has come in useful to supplement the pension shortfall, but that nest egg is now half gone.

It will certainly help if you have other money saved.

This is what happens when you spend all the money elsewhere, and when interest on savings is 0.07%. The banks make huge profits, for sure, but we all get screwed.

So where did all the money from the bubble years actually...go?

Why is it people automatically assume the world is centered on the USA?

I agree with JeffLee on this one, and I think neither he nor I are Americans.

The simple historical record is that the US stock market is the miracle that you'd have wanted to invest in decades ago. Even 10 years back after the Lehman shock etc, those who stuck with US stocks have been nicely rewarded.

Past performance is not a guarantee, but hey, I think there are sound reasons behind the successes of the US stock market, which simply don't exist in other markets like that of the land of the aging populace.

Good luck with that formulation Japan. We are doomed here.

This is all just a pre-workout massage for when they finally announce the retirement age being raised to 70 and then 75.

Raising taxes isn’t going to cut the mustard. When people are living to 90 and 100, you can’t go with the same system that was set up when people lived to 70 and 75.

@Yubaru

Why is it people automatically assume the world is centered on the USA?

Because 53% of the value of all the equity in the world is issued in one country - the USA. Historical returns on US equity show it's the place to put your money. You can buy ETFs with US securities just as easily as those with Japanese securities in Japan. You'd be a bad investor not to do so.

NONE of the Government Retirement subjugation funds where ever designed to be the end-all support for the retiree or seniors beyond their abilities to continue working. Individuals where always expected to save towards their planned retirement or in the event of an unforeseen life altering disability.

So where did all the money from the bubble years actually...go?

Into empty concrete boxes and roads&bridges to nowhere, to fill the coffers of construction companies who then donated huge amounts into LDP election campaigns.

Schopenhauer - Government pension system today has many problems but it has a good thing too. Government pension can cope with inflation while civilian insurance or pension companies cannot.

This is a total misnomer. I have no idea what you mean by private pension companies. There are long-term investment plans like superannuation that pay great returns and are scaled with inflation.

cracaphat, looks good, for you young fellers.

Raising taxes isn’t going to cut the mustard. When people are living to 90 and 100, you can’t go with the same system that was set up when people lived to 70 and 75.

That's right.

The drum beating for "savings, not taxation" will steadily grow louder.

If the government is going to force you to do something, it's better they force you to save your own money, rather than force you to pay more taxes!

If you British, sign up for Class 2 NI contributions ASAP. £15 a month!

Thank god, some starts telling the truth.

The rich go richer so as the standard employees can save less and a slave tot he system.

I can manage on my own.

My grandma always said to me spending on savings are the best investment if it is long term.

I believe I could retire in a few years if to live plainly, thanks only to my hard work and correct budget management.

Why anyone with a functioning brain would put money into a government run pension is beyond me...

If the govt pension won't allow people to retire on time with enough to live on, we need to get a refund.

Drop all but the bare minimum of taxes so sons can support their elderly fathers, while the grandparents can be the daycare while parent is at work. Many adults are moving back in with their parents. It may happen naturally after this thing collapses.

Who actually pays into this J government pension scam scheme anyway?? Just save cash every month for 40 or 50 years and you'll be laughing when it comes to your time to retire. This pension scam scheme will not survive, it will collapse at some stage and all monies put into the pension scam will be lost.

Who actually pays into this J government pension scam scheme anyway??

Non law-breakers.

Unless you are legally exempted through system like social security agreement, or whatever else, you had better abide payment, or you might lose your visa or even PR