JAPAN: 96.6 Billion Yen Pension Shortfall Discovered

About 137,000 people missing out on due benefit payments TOKYO (The Yomiuri Shimbun), December 29, 2007: About 137,000 people who were entitled to payments from 621 different employees pension funds had failed to receive a total of about 96.6 billion yen in pension benefits as of March, a Health, Labor and Welfare Ministry investigation has found. Such pensions are funded from premiums collected through the employees pension plan, one of the public pension schemes, and managed by firms and industrial groups under the pension fund. For this reason, the probe's finding may result in another failure to pay appropriate benefits under the public pension plan. The ministry's responsibility for supervising the funds also might be questioned. Akira Nagatsuma, deputy chairman of the Democratic Party of Japan's Policy Research Council, has demanded that the ministry look into the funds' failure to pay pension benefits. The ministry inspected 621 employees' pension funds, excluding those already dissolved or that plan to return responsibility for management of pension premiums to the central government. The inspection found that about 137,000 people had missed out on an average of 203,000 yen per person per year, meaning that the funds failed to pay a total 27.8 billion yen in pension benefits every year. On average, the affected payees had been members of their funds for 8.4 years. One out of five had been a member of their funds for more than 15 years. Of the 137,000, the funds do not know the whereabouts of about 36,000 people, meaning they are unable to inform them that they are eligible to receive benefits. The funds were established by individual firms and industrial groups. Some of the funds require their members to claim benefits within a stipulated period of time after they reach pensionable age. One fund does not pay benefits if its members fail to claim within five years of becoming eligible. More than 90 percent of the 621 funds mail benefit application forms to their members when they reach pensionable age or when they retire from a company. However, 36 funds only send the application forms to members upon request. In addition, of about 1.17 million former members of such funds aged 59 or younger who withdrew from the funds due to changing jobs or other reasons, but who will become eligible for benefits when they turn 60, the funds do not know the whereabouts of about 84,000. Therefore, the number of people who do not receive benefits from the pension funds is likely to increase. In October, the ministry instructed the funds to take measures to counter the problem, such as sending benefit application forms to all people eligible for the benefits. With regard to payees whose whereabouts are unknown, the ministry suggested the funds obtain copies of resident registers from municipal governments covering the last known address of the missing member. To resolve the problem, the ministry plans to match account records of the fund members with those of employees and other pension plans held by the Social Insurance Agency to determine the current addresses of those eligible to receive benefits, but whose whereabouts are unknown. With regard to corporate pension plans, large sums of unpaid benefits also have been discovered at the Smaller Enterprise Retirement Mutual Aid Plan, a plan managed by Pension Fund Association and other schemes besides the employees' pension fund. © The Yomiuri Shimbun.