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The LIAJ made a Recommendation on the Social Security Reforms; Establishing a Private Pension Scheme "Longevity Pension"to complement the Public Pension Scheme: For Social Security System that provides Peace of Mind for Society

19 February, 2016

 

The Life Insurance Association of Japan, LIAJ (Chairman: Yoshinobu Tsutsui, President of Nippon Life Insurance Co.) made a recommendation on social security reforms in its report: "Establishing ‘Longevity Pension’ to complement the public pension scheme: for social security system that provides peace of mind for society". The report recommends to establish a brand new whole life private pension scheme to complement the public pension scheme as a cross-over scheme between public security system and private security system.

As the association of life insurers that play key roles in the social security system, the LIAJ is determined to strive for the establishment of social security system that provides peace of mind for society, by appropriately participating in the discussion to enhance the sustainability of social security system as well as by developing and providing better insurance products and services and by universal distribution of insurance products.

<Summary of the Recommendation>

  • ▶  While Japan’s social security system has underpinned the economic growth after the World War II by providing peace of mind for the society as a whole, there is a growing doubt on its sustainability as the society is under the rapid aging.

  • ▶  In order to make the social security system more sustainable, it is essential to complement the roles and functions of public security system by private security scheme (self-help efforts). To this end, people should be encouraged to design a financial life plan and prepare for retirement in advance on their own.

  • ▶  The key challenge in financial life planning is to ensure a secure and stable source of retirement income (pension). The LIAJ recommends establishing a private pension scheme "Longevity Pension" as an applicable solution.

  • ▶  This private pension system will, together with the public pension system, assure secure and stable income throughout life after retirement. And consequently, it is expected that public expenditure (including those for social aid) will be held down and consumption by working generation will be encouraged by reduced anxiety for the future.

Report "Establishing ‘Longevity Pension’ to complement the public pension scheme" (extract)PDF