Japanese Lawmakers Approve Pension Reform Bill

May 11, 2004 (PLANSPONSOR.com) - A scandal over missed pension payments in Japan has prompted two prominent politicians to resign their posts and lawmakers to approve a pension reform measure.

A majority of lawmakers in the more powerful of Japan’s two legislative chambers approved the bill, which gradually raises premiums over the next 14 years while lowering the minimum level of benefits, parliamentary spokeswoman Shiharu Kasahara said, according to news reports. The bill is expected to go before the other lawmaking chamber in coming weeks.

Public broadcaster NHK said lawmakers from the Democratic Party, Japan’s largest opposition party, boycotted Tuesday’s lower house session to protest the vote.

Meanwhile, the pension reform debate has sparked bitter partisan infighting and led two top politicians to step down from their posts after it was revealed they had failed to make pension payments.

On Monday, Naoto Kan, head of the Democratic Party, announced he would resign as party chief after admitting he missed payments to the national pension system. Last week, Chief Cabinet Secretary Yasuo Fukuda resigned after admitting he also had unwittingly missed payments. Kan had resisted quitting but pressure built over the weekend for him to atone for failing to make payments while he was health and welfare minister in the 1990s.

The damaging admissions also come just two months before elections for the upper house of Parliament. Sixty-two percent of respondents to a poll by public broadcaster NHK had less confidence in the pension system since hearing that lawmakers had missed paying their premiums. Another 26% said they didn’t have much faith in the system to begin with.