Japan

Gov’t rejects ¥20 mil savings estimate for those living to 95

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The government on Tuesday decided not to endorse a financial panel report that has come under fire for estimating that a retired couple would find themselves with a shortfall of 20 million yen under Japan's public pension system if they live to be 95 years old.

"It has caused extreme worries and misunderstanding," Finance Minister Taro Aso said in explaining the reasoning behind not accepting the report, in an apparent effort to fend off criticism from opposition parties over the credibility of the country's pension system. Ruling party lawmakers have also been angry about releasing the controversial report ahead of the upper house election in the summer.

Chief Cabinet Secretary Yoshihide Suga also told a separate press conference that the government would not receive the report as an "official" one, because it runs counter to its view that the pension system serves as the basis of household finances during post-retirement years.

The report was released last week by a panel under the Financial Services Agency and was supposed to be submitted to Aso. It was compiled with the aim of encouraging the public to take a more proactive role in managing and investing their assets in the face of an aging society and a declining workforce, which is the backbone of the pension system.

Citing an example of a couple with a man aged 65 or older and a woman 60 or older, the report said they would face a monthly shortfall of 50,000 yen if they depended only on their pensions.

If the couple were to live for 20 more years, they would be short by 13 million yen, and if they were to live for 30 more years, they would be short by 20 million yen, according to the paper, which based its figures on the average income and expenditures for elderly households.

According to one government estimate, one in four Japanese who are currently 60 will live until 95.

The 78-year-old finance minister said while the government maintains the pension system is meant to cover, "to some extent," the livelihoods of the elderly, though not fully, the report gave the impression that the plan cannot even achieve that goal under current policy.

He also said the lives of the elderly are "diverse" and that the estimate was misleading in that it was based on rather simple mathematics.

The report, however, has emboldened the opposition parties that saw it as reflecting the government's view that pension benefits are not enough to live a comfortable post-retirement life.

Renho, of the main opposition Constitutional Democratic Party of Japan, criticized Prime Minister Shinzo Abe during a parliamentary committee on Monday, saying, "Is Japan a country in which people will face difficulty in living without having 20 million yen when they get old?"

Akira Koike of the Japanese Communist Party also said at the Diet, "It is an approach equivalent to fraud by the government to tell the public not to rely on the pension and save money on your own."

While admitting that the report's estimate was "inaccurate," Abe insisted that the credibility ofRead More

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