The 1994 Reform Bill for public pensions in Japan: Its main contents and related discussion

In March 1994 the Japanese government submitted a bill to the National Diet to reform the public pension system. It proposes to increase the normal retirement age for the flat‐rate basic benefits for employees from 60 to 65 years of age by stages (between 2001 and 2013 for men), while guaranteeing to pay the earnings‐related benefits for them from age 60 without any reduction. It also proposes a much more generous earnings‐test and an introduction of old‐age employment benefits, both to encourage later retirement. Another main proposal is to switch the benefits indexation from a gross to a net wage basis. This paper gives a detailed explanation of the bill, discussing why such a reform bill is submitted, whether or not it can manage to control the cost of social security in the long term, and whether or not the reform measures can effectively generate jobs for the elderly. Pensions for women, as well as some measures to support both childbirth and childrearing, are also explored.