Pension reform to include part-timers

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Pension reform to include part-timers

Yomiuri Shimbun

Daily Yomiuri, April 22, 2003

Japan - The Health, Labor and Welfare Ministry on Tuesday presented a proposal that would require part-time employees who work more than 20 hours a week or earn more than 650,000 yen a year to enroll in a corporate employee pension plan in order to expand the number of subscribers to such plans.

The proposal was submitted to a study panel of the ministry's Examination Committee of Social Insurance so that the new standard can be included in the scheduled reform of the country's pension program in autumn.

If the standard is introduced, about 4 million people will become new subscribers to the corporate employee pension plan. The proposal will be discussed at a meeting of the panel and a plan will be included in the ministry's proposal for pension system reform, which will be compiled by autumn.

Under current regulations, part-time employees who work more than three-quarters of the hours worked by regular employees, are required to be enrolled in the corporate employee pension plan. Part-time employees who work fewer hours are supposed to enroll in a national pension plan. In addition, if an employee has an annual income of less than 1.3 million yen and is a dependent of a corporate employee, they are exempt from having to pay premiums.

Generally, employees who usually work 40 hours or more a week are considered regular employees. Therefore, part-time employees who work between 20 and 30 hours are expected to join the corporate employee pension program under the new standard.

The proposal also requires part-time employees with more than 650,000 yen in annual income to enroll in the corporate employee pension plan, a move that is expected to expand the range of subscribers to those who have a high income although they work fewer than 20 hours a week.

However, the idea of including a standard income may create an obstacle because some part-time employees may seek to combine several jobs with lower incomes and it cannot be assumed that all part-time employees have only one source of income.