Pension System in Japan

Japanese Prime Minister Yoshihiko Noda said Monday that he does not intend to disclose his Democratic Party of Japan’s estimate on how much money will actually be needed to finance an envisaged pension system.

During a question session at the House of Councillors’ plenary session, Noda emphasized that the basic framework of the new pension system has already been shown as part of the draft plan for comprehensive tax and social security system reforms that the government and the DPJ adopted late last month.

The draft calls for, in part, the introduction of a minimum guaranteed pension of 70,000 yen per head and a hike in the consumption tax to 10 pct from the current 5 pct in fiscal 2015.

But it has been reported that the ruling DPJ has made an estimate that additional tax hike of up to 7.1 pct will be necessary in fiscal 2075 to finance the minimum guaranteed pension.

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