Counselor

Japan’s population decreased last year, two years earlier than expected, for the first time since the World War II. It will continue to decrease in the coming decades due to low fertility rate and aging of society. By 2050, the total population will decrease from 127 million in 2000 to 101 million by 20.7 % and people older than 65 years old which accounted for 17.4 % of the total population in 2000 will account for 35.7 % of the total population. ( Figure 1-1 Population Trends by Age Group, Figure1-2 Projected Fertility Rate and Life Expectancy at Birth) The high level and rapid pace of Japan’s aging society will exceed other developed countries ’ cases (Figure 1-3 Aging of the Population in G5). It surely causes huge challenges for our public pension system, public medical insurance system, public long-term care insurance system and the overall budget which is already deep in deficits. Japan, therefore, is now in the forefront of dealing with challenges of an aging society and tries to be the first to succeed, rather than the first to fail, in those efforts. I intend to illustrate Japa n’s public pension system and its reform efforts with emphases on (i) mandatory review, obligated by the legislation, of the financial status of public pensions every five years, which often triggered and helped to complete reforms to improve the financial status, and (ii) introduction of automatic adjustment of benefit levels by fixing final pension premium levels and implementing “adjustment indexation ” which modifies the indexation taking into account the decline in number of those paying into the system and the improvement of life expectancy of older people