Japan's Pension System Faces Reform Amidst Aging Population
Japan's Ministry of Welfare is preparing for a crucial reform of the public pension system next year, addressing the challenges of an aging population and declining birthrate.
A council convened by the ministry is studying various scenarios for the system's financial verification, which estimates future benefit and premium levels based on demographic and economic projections. The previous review in 2019 projected a potential 30% reduction in future national pension benefits.
The council will explore options to increase benefit levels, with results expected this summer to inform the upcoming reform. Proposals include extending the national pension contribution period by five years to age 65, revising the suspension of benefits for working elderly, and expanding coverage to certain part-time workers.
Discussions also focused on future demographic and economic conditions to assess the system's fiscal outlook. These projections will be crucial in shaping the reform and ensuring the long-term sustainability of the public pension system in the face of Japan's evolving demographic landscape.