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Japan to Cut Pension Benefits amid Deflation |
| Source: |
www.japantoday.com |
| Source Date: |
Tuesday, December 21, 2010 |
| Focus: |
E-Commerce
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| Country: |
Japan |
| Created: |
Dec 28, 2010 |
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The government decided Monday to cut national pension benefits in the next fiscal year for the first reduction in five years, given falling prices in the Japanese economy, government officials said.
Prime Minister Naoto Kan accepted the conclusion reached by the welfare and other ministers concerned whom he had asked to consider whether the government should lower the payout level in fiscal 2011 starting in April, the officials said.
The decision came despite calls by some ruling lawmakers for maintaining the current level to avoid any trouble with the aged, who make up a significant portion of Japanese voters, before the nationwide regional government elections next year.
Law requires the government to review the amount of benefits every year to reflect domestic prices. Japanese prices, gauged by the nationwide consumer price index, fell for the 20th consecutive month in October.
A decision to maintain the payout level would require special legislation, and was feared to lead to imposing additional financial burdens on future generations. The condition of Japanese pension finances has been deteriorating as the insurance premium has been falling.
“We must not pass any burden on to future generations,’’ Koichiro Gemba, national policy minister, told reporters after meeting with Kan and other ministers. ‘‘We agreed not to take any halfway measure and decided to go by the rules.’‘
The payouts have been at the same level since the last reduction in fiscal 2006.
Under the National Pension Plan, the full benefits currently amount to 66,008 yen per month. If the decision is enforced, they would be reduced by around 0.3%, or about 200 yen, in fiscal 2011.
The new payout amount will be finalized next month after the release of November and December consumer price figures.
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Japan to Cut Pension Benefits amid Deflation The government decided Monday to cut national pension benefits in the next fiscal year for the first reduction in five years given falling prices in the Japanese economy government officials said
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