Japan 2011

Japan’s retirement income system comprises a flat-rate basic pension; an earnings-related pension; and voluntary supplementary pension plans.

The following table shows Japan’s position when compared to the 15 other countries and some of the indicators that either scored relatively well or poorly.

The overall index value for the Japanese system could be increased by:

• raising the minimum pension for low-income pensioners
• increasing the level of pension provision and hence the expected net replacement rate for all income earners
• introducing a requirement that part of the retirement benefit must be taken as an income stream
• introducing taxation incentives for employee contributions to the supplementary plans and other forms of retirement saving
• announcing a further increase in the state pension age as life expectancy continues to increase

The Japanese index value rose slightly from 42.9 in 2010 to 43.9 in 2011 due to small increases in both the adequacy and sustainability sub-indexes.