Diet OKs pension reform law to ensure more contributions

 law that will scrap a 1.06 million yen annual income threshold blamed for prompting part-timers to limit their work hours, while opening the way for a future boost to basic pension benefits.

1.06 million annual income just being replaced with 20 hours/week threshold, since on year there's more less 54 week, while part time paycheck around 1000 yen/hour. So it's basically change from 1.06 to 1.08 million per year. Remember the threshold now in hours, if there's a week that exceed 20 hours then those part timer will be required to join pension.

https://www.reuters.com/business/world-at-work/japans-labour-crunch-forces-rethink-traditional-homemakers-2025-06-12/

When the barrier is scrapped, an additional 1.8 million people are estimated to join the pension scheme, according to the government.

Basically just getting more and more people to join pension scheme.

The pension system is actually in surplus, with the extra amount going to the GPIF, which is the world's largest pension fund, and indeed one of the largest asset pools in the world. It is growing rapidly, too, up over 22 percent in the last fiscal year.

The law is also intended to brace for a potential future decline in basic benefits for all pensioners if economic growth remains sluggish.

Totally unnecessary. Even if such a decline were to occur, the govt can still continue paying pensioners through keystrokes on a keyboard. Japan routinely does this (print money) -- because it can.

This story is about politicians making political decisions. They clearly don't understand how public finance works.

One thing is sure, young Japanese workers will be taxed at a greater rate going forward for just about anything. Governments don’t produce money they take it!

@kurisupisu

While at the same time they wondering why young people spend less and less, and even doesn't start a family. Well their take home pay being decreased while items price skyrocketed.

1.06 million Yen ~ 7,495 USD . . . seems not very much for a year? I would like to see an itemized break down of average living expenses per Japanese retiree . . . .

sakurasuki

1.06 million annual income just being replaced with 20 hours/week threshold

True.

Why can’t this article report that fact?

By not including it, the article gives the false impression that part-time workers will no longer be able to curb their work hours to avoid having to contribute to employment pension plans.

—

Better explanation at the Yomiuri link below.

https://japannews.yomiuri.co.jp/politics/politics-government/20241109-221585/#

1.06 million annual income just being replaced with 20 hours/week threshold,

With all those downvotes, one apologist is obviously very upset to see this point reported.

The real purpose of this law is to allow the government to cut benefits. The law paves the way for "future decline in basic benefits for all pensioners."

Totally unnecessary. Even if such a decline were to occur, the govt can still continue paying pensioners through keystrokes on a keyboard. Japan routinely does this (print money) -- because it can.

It’s not because Japan has been able to monetize a massive public debt without triggering uncontrollable inflation so far that it will be able to continue doing so indefinitely.

In case you haven’t noticed, Japan is no longer in deflation. But it’s extremely difficult for the BOJ to take the necessary steps at this stage—namely, raising interest rates—because of the sheer size of public debt.

Can you name a single historical example of a country with such a high level of public debt where things didn’t eventually end in tears for its citizens?

“This story is about politicians making political decisions. They clearly don't understand how public finance works.”

At the moment, the government pays more than 40% of the pension benefits by printing money electronically. All it takes is a few strokes on a keyboard. No need to raise pension premiums to make ends meet.

How self important they think they are. People don’t work to avoid pension payments. Ridiculous and amazingly stupid.

Base of Japanese paying premiums or taxes for pension will rise while pensions will get reduced .

How do you think a country with a continuous growing drop of population and at the same time growing debts is going to end sooner than later in a finite world ?

A 20 hours work per week threshold is dooming many Japanese to get poorer.

I don't understand the logic in the story. It says people deliberately work less to stay below an earning cap so they don't have to pay into the pension. It says removing the cap will make them work more and ease labour shortages (logic okay to this point). It then says it will result in 1.8 million people newly paying in?!

They should remove the 20h/week threshold and increase the max income from 1.06 for dependents. Foreigners are willing to work longer hours thus eliminating some labor shortage.

The age pension system in Australia is the world best practice which started in the 80's. Now the government pays very little on aged pension as 4 in 10 retirees receive an aged pension where before the 80's 10 in 10 use to saving billion a year of taxes. Now these saving are spent on keeping the aged socially active in the community allowing to better life outcomes. I tottally enjoy to saying this that it was left initiative and was hated by the conservative. But today the conservative side of society fully indorse this system and would not dear alter it. Back in the 80's a law was pass the the employer had to pay 7% of the employee wage into a supperannuation fund. Not 7% from their wage but 7 % on top of the workers wage. The conservative went ape S*&^ at the time and promise to rescind the law. Today the % is now 12% of the wage weather you work one hour or 40. the worker can only access the fund at the age of 65. It been 45 years and even a minimum wage earner of 40 years can now retire financial comfortable.

With people being required to have a my number card, why doesn’t the government just make it mandatory for all workers to pay into the system. How many people are on various kinds of part time contracts, gig contracts, free lance contracts, independent contracts and so on.

The more the government takes baby steps towards this end, the more businesses find loopholes to keep from having to match pension premiums.

Some simple statistics show that Japan, not only has the lowest Pension system in the world for the 1st World Countries, but even lower than most of the 2nd World Countries, which means it's ridiculously low.Basically, even if you were a CIO or a CEO, if you didn't save money, you are condemned at a poverty life, with a monthly amount that cannot even cover a monthly house or apartment rent or mortgage.

In ANY other countries in this world, people went out to protest against those kind of things, for the lower pensions and benefits, while in Japan is always the "shoganai", accept and swallow everything your Govnmt does and says. Only people that do not know how ridiculously small the pension is here, will not understand the struggle of the retired seniors to barely live day by day with this callous income.

The first step is recognizing that you are tax livestock and your cotton god the flag does mean anything. The good news is Japan is a cheap place to live. The opposite of what I was told.

https://youtu.be/3KnGNU6UyCM?si=XAKNDLHaJyUrfPpa

DanteKHToday  06:21 pm JST

Some simple statistics show that Japan, not only has the lowest Pension system in the world for the 1st World Countries, but even lower than most of the 2nd World Countries, which means it's ridiculously low.Basically, even if you were a CIO or a CEO, if you didn't save money, you are condemned at a poverty life, with a monthly amount that cannot even cover a monthly house or apartment rent or mortgage.

In ANY other countries in this world, people went out to protest against those kind of things, for the lower pensions and benefits, while in Japan is always the "shoganai", accept and swallow everything your Govnmt does and says. Only people that do not know how ridiculously small the pension is here, will not understand the struggle of the retired seniors to barely

Indeed. The basic Kokumin Nenkin is around ¥66,000. The average pension for a company employee (Kokumin + Kōsei) is about ¥150,000. The maximum is around ¥300,000 because, unlike in other countries, there is a cap—and it’s a very low one. These amounts are ridiculous compared to other developed countries. With 30% of the population over 65 living on this kind of income, the economy is not going to boom!

If one is not enrolled in a company pension in Japan they should have a iDeCo in addition to a NISA.

Why does it take so long to enact a bill? Always something shady going on.