Latest news with #iceAgeGeneration
Japan Times
14-05-2025
- Business
- Japan Times
LDP approves pension reform legislation
The ruling Liberal Democratic Party (LDP) on Tuesday approved draft legislation for pension system reform at a meeting of the party's decision-making General Council. The government aims to adopt the legislation at a Cabinet meeting Friday and submit it to the current session of the Diet, the country's parliament. Before the General Council meeting, executives of the LDP and its junior coalition partner, Komeito, held talks, agreeing to work for the enactment of the legislation during the Diet session ending in June. The government originally expected to introduce the legislation in March. But the move has been delayed because the LDP was reluctant to hold Diet debates on pensions, a hot topic, ahead of this summer's election for the House of Councilors, the upper chamber. At the General Council meeting, former digital minister Taro Kono expressed opposition to the legislation as he seeks "radical reform." But he did not oppose its submission to the Diet. Another attendee pointed to the need to listen to the voices of younger people, particularly members of the "ice age" generation who had trouble finding jobs after graduating from schools between around 1993 and 2004, ahead of the Upper House poll. The main pillars of the legislation are expanding the coverage of the kōsei nenkin public pension program for corporate and government workers to include a wider range of part-time workers and reviewing the system of reducing benefits for elderly employees earning certain amounts of income. The LDP planned to include in the legislation a hike in the basic pension benefit level using funds from the financially robust kōsei nenkin program and the state coffers. But it was removed after a series of objections. The basic pension level is likely to be about 30% lower than now by the time when the ice age generation, now in their 40s to 50s, are in their 70s to 80s. Many in the generation face the risk of old-age poverty as they would have to live mainly on the basic pensions after retirement, since many failed to win regular jobs and thus are not eligible for the kōsei nenkin program, which pays benefits that add to the basic pensions. While some LDP lawmakers are reluctant to discuss pensions at the Diet, others have raised questions about the absence of the basic pension hike from the legislation. In the opposition camp, Yoshihiko Noda, leader of the Constitutional Democratic Party of Japan, criticized the LDP, saying that the basic pension hike should be the most important element of the pension reform. Reform measures in the legislation "won't relieve people's worries about the future," Yuichiro Tamaki, head of the Democratic Party for the People, said, questioning whether the LDP is seriously thinking about ways to help the ice age generation.
Japan Times
07-05-2025
- Business
- Japan Times
Japan's 'ice age' employment generation is at risk of poverty during retirement
Japan's "employment ice age generation," now in their 40s to 50s, faces an increasing risk of being in poverty when they are older even if they fully receive basic pension benefits. Due to low wages they tend to earn during their working years and protracted pension adjustments reflecting the country's demographic changes, many in the generation may end up relying on welfare benefits. Experts call for shoring up pension benefit levels and providing housing support for the generation. The ice age generation refers to about 17 million people who entered the job market from around 1993 to 2004, when it was difficult to find jobs after Japan's asset bubble collapsed in the early 1990s, kicking off long-term stagnation. The generation has many low-paid nonregular workers. Many in the generation also have short histories of participation in the kōsei nenkin pension system for corporate and government employees, which pays extra benefits that add to benefits under the kokumin nenkin basic pension program with universal coverage. To many in the generation, the basic pension will be the key source of income after retirement. The basic pension is paid in full if participants pay premiums for 40 years. The regular full amount in fiscal 2025 is set at ¥69,308 ($484) per month. However, many people in the ice age generation have periods in which they did not pay premiums or were exempted from paying due to a lack of income. The benefits they will receive will, therefore, be less than the full amount, likely leaving many struggling to make ends meet after retirement. This is feared to result in a sharp increase in welfare benefit recipients, placing a massive strain on public finances. The total monthly amount of welfare benefits, including rent aid, is ¥130,580 for people between 65 and 74 living in Tokyo's 23 wards. Welfare benefit recipients are also entirely exempted from paying out-of-pocket costs for medical and elderly care services. Those receiving pensions can be eligible for welfare benefits if their pension income falls short of the welfare benefit level. "People without assets or relatives are likely to be protected" under the welfare benefit program, a Tokyo Metropolitan Government official said. The welfare benefit level is regularly revised to reflect the consumer spending and inflation situations. But the basic pension level is adjusted in a way its growth is kept slower than inflation, causing the gap between the welfare and basic pension benefits to widen. The basic pension adjustments are set to continue until fiscal 2057, when the ice age generation will be in their 70s and 80s, with the level expected to be about 30% lower than it is now. To improve the situation, the government hoped to include a measure to bolster the basic pension program with funds from the financially robust kōsei nenkin program in the public pension reform legislation it plans to introduce during the current parliamentary session ending in June. This attempt has been abandoned, however, amid strong opposition within the ruling Liberal Democratic Party. The government should consider steps to secure housing and support the livelihood of the ice age generation after paving the way for the basic pension boost, said Kohei Komamura, social policy professor at Keio University. "If many in the ice age generation, which has a high unmarried rate, continue to live alone in their old age, they will be more likely to experience deteriorating health," Komamura said. "If we develop shared housing for the elderly with living support services and encourage them to live together, I think we'd be able to help reduce their living costs and prevent loneliness and poverty."
