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Nonpartisan panel to study reforms for pension system

By: Unknown Author
 Asahi Shinbun, July 6, 2002



In a rare initiative, politicians will work together on ways to streamline and protect payouts. As the national pension program creaks ever nearer collapse in a society with ever more old people, lawmakers from the Liberal Democratic Party and opposition Minshuto (Democratic Party of Japan) are mounting a study group that aims to draft reforms before the 2004 mandate.

The bipartisan effort is a radical departure from the usual pattern of letting bureaucrats lead the reform process.

The study is important, since any decision to increase premium payments or reduce benefit payouts would have an immediate effect on people's retirement plans. In the past, politicians, worried about the public uproar that could accompany heftier pension input, have settled for stopgap adjustments even as the pension system began to sag.

The issue has often become hostage of political parties jockeying for an advantage. That, in turn, has increased public distrust in politicians and in the pension system.

The group hopes to develop a plan that will receive nonpartisan support, which is a challenge, given the widely different policies of the two parties.

Yuji Tsushima, chairman of the LDP's research commission on the annuities system, and Takashi Yamamoto, a top official in charge of welfare issues for Minshuto, will draw from their respective parties to form the panel by the end of July. About 20 politicians, half from each party, are expected to be involved.

Previously, the Ministry of Health, Labor and Welfare created draft reform proposals based upon opinions elicited from experts and endorsed by lawmakers in the ruling parties.

With pension premiums revised every five years to maintain set levels of payouts, experts have called for dramatic changes.

Some see the prospect of a trend in which lawmakers will take the initiative in plotting reforms, and the ministry has agreed to seek opinions from political parties as reforms are drafted.
The bipartisan group emerged from a meeting in January of politicians involved with pension issues. A former Swedish welfare minister responsible for his nation's pension program was invited.

Members of the LDP and Minshuto say reforms should be based upon the Swedish model, but they have agreed on little else.

Minshuto wants minimum pension payouts funded by pumping tax money into the system. The LDP and the administration lean toward fixed premiums and adjusted payouts.

The parties are still divided on using a tax infusion to keep the pension program covered. This fundamental dispute could hinder the panel's efforts to find solutions.

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