Falling through the cracks
Japan’s National Pension System is designed to cover all Japanese adults between the ages of 20 and 60 but many citizens are falling between the cracks of an already outdated system. As Japan’s corporate system has changed, so have work patterns. Companies are increasingly hiring part-time workers and many younger people have been forced into part-time work as permanent employment prospects have shrunk as a result of Japan’s vicious recession.
Part-time workers are not covered by the National Pension System and despite proposals in 2003 from the health, labour and welfare ministry to provide cover it was strongly opposed by both companies and government parties. Instead, the government has agreed to consider the matter and make a decision in five years’ time. No one seems quite certain how many part-time workers there are, although some estimates put the number as high as 12 million.
Meanwhile, some Japanese outside the pensions system aren’t working at all. “They’re called Neets,” says David Baran, founder of Symphony Financial Partners. “It stands for ‘Not in employment, education or training’. The system doesn’t recognize them: they don’t officially exist. No one knows exactly how many there are: perhaps 1 million, perhaps 2 million.