Chapter 3 Overview of the Pension System in Japan

Transcription

1 Chapter 3 Overview of the System in Japan [Structure of the Public System] (As of 31 March, 2004) National Fund approx. 79 thousand subscribers Definedcontribution Defined-contribution Defined-benefit Corporate Employees Insurance Scheme approx million subscribers including those of the former three Mutual Aid Associations and the former Mutual Aid Associations of Agriculture, Forestry and Fishery Corporation Personnel Employee s Fund approx million subscribers (Substitutional portion) Mutual Aid approx.4.67 million subscribers The National System (the Basic ) Self-employed persons, etc. Insured spouses of No. 2 insured person Private company workers Public service employees, etc. Approx million participants Approx million participants Approx million participants No. 1 insured person No. 3 insured person No. 2 insured person Approx million participants No. 1 insured person No. 2 insured person No. 3 insured person Self-employed persons, farmers, etc. aged 20 or over but under 60. Employees in private sector, public employees, etc. Spouses of employees in private sector and public employees, etc. Each pays a fixed amount of premium. 13,580 per month (From April 2005 through March 2006) Remuneration-based premium. rate of the Employees Insurance is fixed at % (from Sep to Aug. 2006) The premium is raised by 0.354% every year. Insurance premiums based on total remunerations in April 2003 and after. Appropriated for the Basic and Employees Insurance Scheme (remuneration-based portion) for No.2 and No. 3 insured person. Employers and employees bear evenly the premium. The insured themselves bear no cost. The premium is paid by the insurer of the pension the husband (wife) is participating in. 49

2 Amount of the Old-Age benefit (As of April 2004) Self-employed persons (amount for a No. 1 insured person of 40 years of enrollment period): 66,208 per month Retired salaried workers and spouses Total of the Employees of No.2 insured person (average income (monthly salary 360,000) for 40 years of enrollment period) and of the Basic (40 years of enrollment period) for a husband & wife couple: 233,300 per month The number of public pension beneficiaries (as of 31 March 2003): million persons Benefits from the Public s (in the 2002 fiscal year):

3 Categories and s of Insured Persons (Subscribers) All of working generation must participate in the National. According to their occupations, they are classified into three categories of the National such as No. 1, 2 and 3 insured person. Also, this categolization decides possible additional pension scheme in which they can join. The pension benefits are determined by the schemes with which insured persons are covered before their application for pension benefits. Categories and s of Subscribers Occupation etc. Self-employed persons, farmers, students, etc. (those of 20 years and over under 60 years old, excluding those shown in the following columns) Employees Employees under 65 years old in private sector covered by the Employees Insurance (Private company workers etc.) Public employees and private schools teachers and employees Full-time housewives etc. spouse of the employee (wife or husband), who make a living mainly by the employees income) National [No. 2 insured person] National [No. 2 insured person] (Note) The premium rates are the standard as of October Scheme National [No. 1 insured person] National [No. 3 insured person] Schemes and premium Employees Insurance Mutual Aid 13,580 per month (fixed amount) % of total remunerations that combine monthly income and bonus ( is evenly borne by employers and employees.) The premiums vary according to the Mutual Aid Associations, ranging from % to % of one s monthly income and bonus. (employers and employees bear evenly) The insured pay no premium (it is borne by the Employees Scheme (the Employees or the Mutual Aid ) in which his or her spouse has participated) 51

4 Structure of Financial Resources for the Basic The financial resources of the Basic comprise contributions of the National (No. 1 insured person pays contribution individually), contributions from insured persons of the Employees Insurance and Mutual Aid Associations (the Employees Insurance and Mutual Aid Associations contribute to the National according to the number of No. 2 insured person and their spouse, No. 3 insured person.), National subsidy (in principle, one-third of the expense of the Basic ). Cost Burden for the Basic Self-employed persons etc. (No. 1 insured person) Employees (No. 2 insured person) (Spouse) (No. 3 insured person) (fixed amount) National One-third of contributions Employers (fixed rate) Widows pension, etc. One-third of contributions from the special national subsidy Employees Insurance System or Mutual Aid Associations Remuneration-based Basic Contribution (the special national subsidy) National System Contribution Basic benefits Recipients 52

5 Structure of Cost Burden for Basic (by contributions and national ) Insured persons of the National Scheme (() persons) System A No. of : a* 1 Contributions for Basic by System A (Contribution unit) Paid by national α/3 System B No. of : b* 1 Paid by national β/3 System C No. of : c* 1 Paid by national γ/3 *2 *2 *2 Contributions for Basic Contributions for Basic by System B by System C α = a β = b γ = c (Contribution unit) (Contribution unit) Benefit payment of Basic [Common payment throughout System A to C] Yen *3 Contribution unit for Basic per insured person Benefit is paid to insured persons *1 The number of in the Employee s Scheme is counted: a. for insured persons from 20 to 59 years old; b. including dependant spouses of the insured persons (No. 3 insured person of the National System). Also, number of in the National Scheme is counted by the number of paying the premium. [ Basic period for calculation of future Basic benefit is objective for calculation of contributions] *2 Amount corresponding to 1/3 of contributions made by each system is paid by the national to each system. (For the Local Public Service Employees MAA, each local municipal corporation will pay.) Thus, 1/3 of total Basic benefit is paid by the national. Additionally, a. benefit corresponding to the exemption period and b. high rate payment by the national for disabled persons whose first hospital visit is before 20 years old, are paid specially by national. *3 Benefit payment of the Basic includes benefits of the Basic based on the New Law after the revision of 1985, and proportionate amount for the Basic (deemed Basic ) in the pension benefit payment based on the National Law, the Employees Insurance Law, and each MAA Law before the revision of

6 The National System Category the insured persons beneficiaries of the Old-Age Basic, etc. Table of the Public System support rate / Average monthly benefit of the Old-Age Basic, etc. (excluding advancement and postponement) Real total expenditures Reserve (Fair Market Value) Extent of reserve (Fair Market Value) (As of 31 March 2004) (as of April Yen No. 1 insured person 2, [9.7] 2.8 [2.7] 13, ) able age of the Old-Age Basic No. 2 insured person 3,625 2, years old No. 3 insured person 1, Total 6,974 Total of insured persons of the public 7,029 pension (Note) 1. In addition, there are 60,000 beneficiaries of the Old-Age Welfare. 2. No. 1 insured persons include insured persons who voluntarily subscribe to the insurance. 3. The number of persons eligible to receive the old-age basic pension, etc. includes the number of persons eligible to receive the old-age basic pension, the number of persons eligible to receive basic pensions for the elderly under the former National Law, and the number of persons aged 65 and over in the employees pension system that are eligible to receive old-age (retirement) pensions under the former law. 4. The average monthly amount of the old-age basic pension is the monthly amount for persons eligible to receive the old-age basic pension, excluding advance and postponed payments. In addition, the average monthly amount of the old-age basic pension, etc. is 52,000, which includes the portion of advance and postponed payments to persons eligible to receive the old-age basic pension as well as the portion to persons eligible to receive the old-age basic pension under the former National Law. 5. Real total expenditures consist of the amount excluding receipts from the basic pension account deriving from benefits, plus the amount that is carried over from the basic pension account. 6. Reserve (Fair Market Value) is based on the current-price evaluation of the portion in the pension assets which is invested in the capital markets including the gains and losses included in the assets carried over from the Welfare Service Public Corporation. Distribution of the gains and losses between the Employees' and National s are based on the comparison between the average reserve balances of the two pension systems. 7. The total of insured persons of the public pension is the total of persons insured for employee pension and of No. 1 and No. 3 insured persons. 54

7 Employees Schemes Category persons covered beneficiaries of the Old-Age (Retirement) (Corresponds to old age and retirement) support rate / Average monthly benefit of the Old-Age (Retirement) (Corresponds to old age and retirement) (excluding advancement and postponement) Real total expenditures Reserve (Fair Market Value) Extent of reserve (Fair Market Value) rate (as of April 2005) % Employees Insurance 3,212 1, [135.9] 4.7 [4.5] The National Public Service employees Mutual Aid Association Local Public Service Employees Mutual Aid Association Private School Teachers and Employees Mutual Aid Association [3.2] 9.3 [9.3] Total 3,680 1, (As of 31 March 2004) able age of the Old-Age (retirement) (FY 2005) Remuneration-based portion General men, women: 60 years old Miners, sailors: 57 years old Fixed-amount portion General men, Female subscribers of EMAA: 62 years old Female subscribers of the Employees Insurance: 60 years old Miners, sailors: 57 years old (Notes) 1. The number of recipients of the Old-Age (retirement) of the Employees and the amount of average monthly pension include the arbitrated portions of recipients of the former Mutual Aid Associations of Japan Railway, Nippon Telegraph and Telephone, Japan Tobacco, and Agriculture, Forestry and Fishery Corporation Personnel before they were integrated into the Employees Insurance. 2. The number of eligible recipients of the Old-Age (retirement) of Mutual Aid Associations includes those related with a deducted retirement pension. (This is also applicable to those related with the Mutual Aid Associations of the former three public corporations and the former Mutual Aid Associations of Agriculture, Forestry and Fishery Corporation Personnel, which were included in the Employees Insurance.) 3. The calculation of the average monthly benefit was made by including that of the Old-Age Basic. However, the following are excluded: those who have opted for advance/postponed payments (including reduced retirement allowances), and those who have reached the age where they should begin receiving the portion proportionate to remunerations but not the age where they should be receiving the fixed portion. 4. Real total expenditures consist of the amount excluding basic pension benefits derived from benefits plus the matched contribution to basic pensions. 5. The Employees Insurance premium rates are % both for miners and for sailors. The premium rates of insured persons which are used at the applied establishments of the applied entities and designated corporation for the former Mutual Aid Associations are 15.69% for Japan Railway and 15.55% for Japan Tobacco. In addition, the premium rate of insured persons which is used at the applied establishments of the Agriculture, Forestry and Fishery Corporations, etc. is %. 6. The reserves of the employees pension insurance do not include the portions of the reserves that are substituted by the employees pension fund. 7. Reserve (Fair Market Value) of the Employees' is based on the current-price evaluation of the portion in the pension assets which is invested in the capital markets including the gains and losses included in the assets carried over from the Welfare Service Public Corporation. Distribution of the gains and losses between the Employees' and National s are based on the comparison between the average reserve balances of the two pension systems. 8. Extent of reserve is an index indicating how many years total substantial expenditures including national and public finance payment additional expenses would be equivalent to a reserve balance as of the end of the previous fiscal year. (It is different from the extent of reserve indicating how many years amount (excluding national and public finance payment) paid by premium contributions among the substantial expenditures would be equivalent to a reserve balance as of the end of the previous fiscal year.) 55