Hi Blog. Here is the proposed future for those of us paying into our nation’s pension plan. Read and weep. Considering Japan’s unofficial poverty line is about 200,000 yen a month, people who retire are forecast to become just that: impoverished. Arudou Debito in Sapporo
New pension data, same grim outlook
THE ASAHI SHIMBUN 2009/5/26, courtesy of TC
The average household that starts receiving public pension benefits this fiscal year will see the payment level drop to about 40 percent of average working household incomes in 20 years, the welfare ministry said.
For households consisting of a man living alone or a working couple, the amount of benefits from the kosei-nenkin pension program for company employees is already below 50 percent of the average income when they first receive payments, the ministry’s estimates show.
The Ministry of Health, Labor and Welfare’s model household comprises a company employee on an average income who has subscribed to the pension program for 40 years, and a wife of the same age who has been a homemaker since marriage.
In February, the ministry concluded that a model household would be able to secure pension benefits of at least 50.1 percent of the average income of working households in the first year of payments.
The ministry’s latest estimates include changes in annual benefits over 20 years.
If the average household begins receiving benefits in fiscal 2009 when the couple reach the age of 65, the payments will be 223,000 yen a month, or 62.3 percent of the average income of working households.
When the couple become 85 years old, the pension amount will be 199,000 yen in terms of current values, or 43.2 percent of the average working household income.
The ministry’s estimates in 2004 showed that a model household would start receiving pension benefits equivalent to 57.5 percent of the average income.
When the couple reach 85 years old, the ratio would be 41.8 percent, according to the 2004 estimates.
Therefore, the latest estimates represent a nearly 5-percentage-point rise in the first-year benefits of the model household.
However, the rise was mainly led by the current decline in household income.
After households begin to receive their benefits, the ratio changes each year depending on price movements.
The ministry’s latest estimates are based on the assumption that consumer prices will rise by 1 percent annually while average household income will increase by 2.5 percent.
The expected decline in the ratio of benefits over the years is also a result of 2004 legal revisions intended to curb pension benefits to prevent the rapidly aging society from draining welfare coffers.
A household of a couple who both worked full time receives first-time pension benefits of 279,000 yen in fiscal 2009, or 48.3 percent of the average income of working couples, according to the latest estimates.
For a household of a man who has remained single since he joined the pension program, the corresponding figures will be 157,000 yen, or 43.9 percent.(IHT/Asahi: May 26,2009)