National Pension Plan Fell into Red in FY 2002

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National Pension Plan Fell into Red in FY 2002

The Asahi Shimbun

March 22, 2004

For the first time in 17 years, payouts exceeded income.

Squeezed by heftier payouts and a drop-off in income during fiscal 2002, the national pension system for the first time in 17 years paid out more than it took in.

Reserves were tapped to make up for the 38.2 billion yen shortfall.

While more people are neglecting to make contributions to the system, the number of pension recipients continues to grow.

Although the Social Insurance Agency took steps in 2003 to secure contributions, the reality of an aging population coupled with a declining birthrate has the feel of an unstoppable force.

Unless the system can find more resources, and quickly, it is expected that reserves will continue to be eaten away.

National pension payouts in fiscal 2002 totaled 3.5834 trillion yen, an increase of 2.7 percent over the previous year. Pension recipients grew by 980,000, to a total of 21.22 million.

Pension payouts rose by about 5,000 yen over the past five years, with pensioners now receiving 52,000 yen a month on average.

On the other hand, in the past year, the amount the system took in actually fell by 2 percent, to 3.5453 trillion yen.

Of that amount, pension contributions totaled 1.8958 trillion yen, a decrease of 58 billion yen from the previous year. The sluggish stock market knocked down investment income by 36.6 billion yen to a total of 189.7 billion yen. The net result was a deficit of 38.2 billion yen.

The number of pension recipients is increasing by about 900,000 a year, while pension payments total about 1.4 trillion yen more than 10 years ago. Income continues to fall from its peak of 3.8 trillion yen in fiscal 1996.