## Benefit level

(Employees' pension (including basic pension benefits of husband and wife))

Standard pension benefit level shall be over 50% of the average income of the household of an active salaried worker when they start receiving a pension benefit (65 years old), and even in the future society with the declining birthrate.

### 50.2 % from FY2023 onward

Adjust benefit level, that is currently 59.3%, along with a declining working-age population. However, the amount of pension that older people receive today will not be reduced.

## Amount of pension benefit

(nominal amount) after the year to start receiving pension benefit will be increased depending on the price increase, however the proportion to incomes of the active working people of respective ages will become lower because the wage increase rate is higher than that of prices in a normal case.

## Premium burden

(Employees' pension/National Pension)

## Before revision

(6.79% for insured persons)

National pension: ¥13,300

## (Employees' pension)

Yearly 0.354% increase (0.177% for insured persons themselves)

* Standard working person (¥360,000 of monthly income and bonus equivalent of 3.6 months' salary)

¥650/month for insured persons

(National pension)

• Since April 2005

## FY 2017 and later

Employees' pension: 18.30%

(business operators 9.15%)

National pension: ¥16,900

National pension: ¥16,900

(FY2004 value $ ^{*} $ )

* "FY2004 value": represent the amount of pension premium by a calculation based on the wage level in FY2004. The actual imposition of pension premium shall be determined by the amount of the premium at FY2004 value that is multiplied by the wage increase rate up to the time of the imposition. Accordingly the amount will change depending on the future status of wage increase.

## Utilization of reserve fund

A method shall be used to achieve financial equilibrium in approximately 100 years. A reserve fund of approximately one year of the amount of benefits shall be retained at the end of the approximately 100 years of the financial equilibrium period, which shall be utilized for the benefit of future generations.

Any increase in the insurance premium level shall be controlled in this way.

## Expansion of state subsidy rate for basic pension and the path to it

## FY2004: launch

Financial resources: reexamination of tax levy of pension (reexamination of deduction for public pension, etc. and abolition of deduction for the elderly)

From approximately ¥240 billion of the increased revenue, ¥160 billion that is the portion left after excluding the amount equivalent to local allocation tax will be allocated for basic pension (11/1000)

## FY2005 and FY2006: expand to an appropriate level

• In FY 2005, ¥110.1 billion from the increased revenue due to the 1/2 reduction of the temporary tax cut will be allocated for basic pension.

• In FY 2006, based on reduction and abolition of the temporary tax cut, 25/1000 of the fund will be covered by state subsidy in addition to 1/3.

• From FY 2007, the state subsidy ratio on and after FY2007 will be raised to $ 1/3 + 32/1000 $ .

• In FY 2008, 40/1000 of the fund will be covered by a state subsidy in addition to the 1/3.

## By FY2007:

[General Principles of Tax System Reform by the Ruling Parties] Achieving fundamental tax system reform, including consumption tax

## By FY2009:

State subsidy will cover 1/2 of the fund