RIETI Policy Symposium

Japan's Pension System -Evaluating the 2004 Reform and Establishing Clear Principles for Further Reforms-

Information

  • Dates, Times:
    Thursday, December 15, 2005; 9:30-17:45
    Friday, December 16, 2005; 9:15-11:50
  • Venue:
    Golden Room, 11th Floor, Keidanren Kaikan
    (1-9-4 Otemachi, Chiyoda-ku, Tokyo)
  • Language:
    Japanese / English (with simultaneous interpretation)

Summary of Proceedings

Opening Remarks

YOSHITOMI Masaru, President and Chief Research Officer of RIETI, provided an introduction on the significance and structure of this symposium.

Various opinions on the 2004 pension system reforms were expounded in academic conferences and the media, but there was a lack of awareness of how the '04 reforms would differ from previous reforms. There was neither theoretical nor practical consensus on the sustainability of the pension system. Moreover, assessment of the '04 reforms was polarized, as they were highly praised by researchers abroad while the mass media in Japan stoked doubts about the pension system among young people. According to recalculations of pension finances by the Ministry of Health, Labour and Welfare, annual revenues and outlays have maintained an equilibrium and the model household internal rate of return has exceeded the anticipated growth rate in wages. At the same time, net pension debt on the balance sheet is upwards of 570 trillion yen (approximately 105% of the GDP), which has been criticized by some scholars. The phrases "intergenerational inequity" and "pension system collapse" have even been used.

In Session 1, KOSHIRO Kazutoshi (Professor Emeritus, Yokohama National University; Vice-Chair of the Pension Council of the Social Security Deliberation Council, Ministry of Health, Labour and Welfare [2002-2004]) will give a presentation titled "The Basic Questions on the 2004 Pension Reforms in Japan." In Session 2, because one of the possible causes of doubts about Japan's pension system is the lack of a clear explanation regarding its principles, two pension reform proposals by RIETI will be explained by RIETI Faculty Fellow FUKAO Mitsuhiro (Professor, Faculty of Business and Commerce, Keio University) and RIETI Consulting Fellow KANEKO Yoshihiro (Director, Department of Empirical Social Security Research, National Institute of Population and Social Security Research) in a presentation titled "Enhancing the Financial Sustainability on a Basis of Clear Principles." In Session 3, "Learning from Pension Reforms in Foreign Countries," Ole SETTERGREN (Director of the Department of Pensions, Swedish Social Insurance Agency), who designed Sweden's Notional Defined Contribution pension system, will discuss why Sweden abolished the basic pension component and was able to switch the entire system to a fully earnings-proportional model. In Session 4, RIETI Faculty Fellows HIGUCHI Yoshio (Professor, Keio University) and KUROSAWA Masako (Professor, National Graduate Institute for Policy Studies) report the results of their analysis in a presentation titled "What Further Reforms of the Pension System Can Promote the Labor Force Participation of the Elderly in Japan?."

In the future 1.5 working people in Japan will support one senior citizen, so maintaining social security will require high GNP growth, including GDP growth and foreign investment. To achieve this, it will be crucial to improve work incentives for seniors. RIETI is planning to collect panel data on senior citizens for the purpose of obtaining comprehensive information, including data on capital and health, in order to contribute to policy formulation for the pension system and other issues related to senior citizens. RIETI Faculty Fellows ICHIMURA Hidehiko (Professor of Economics, Graduate School of Public Policy, The University of Tokyo), SHIMIZUTANI Satoshi (Associate Professor, Institute of Economic Research, Hitotsubashi University), and NOGUCHI Haruko (Associate Professor, Faculty of Social Science, Toyo Eiwa University) will report on the results of their pilot study. On December 16, these presentations will be debated together with RIETI Research Counselor and Faculty Fellow TACHIBANAKI Toshiaki (Professor, Graduate School of Economics, Kyoto University) and ASO Yoshibumi (Professor, Faculty of Law, Keio University), and this panel discussion will serve to sum up the symposium.