Japan 2010

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

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; and
• raising the state pension age to reflect increasing life expectancy.

The Japanese index value increased slightly from 41.5 in 2009 to 42.9 in 2010 due primarily to the introduction of the new questions.