Japan's new government announced on October 8 that it will replace the Social Insurance Agency (SIA) with an independent government corporation, the Japan Pension Agency (JPA), to improve the overall efficiency of public pension administration. The JPA, which will be supervised by the Ministry of Health, Labor, and Welfare (MHLW), assumes the pension-related responsibilities currently performed by the SIA beginning January 2010. The SIA has in recent years been involved in a public debate set off primarily by the discovery of more than 50 million unidentified public pension records, which compromised its role as the principal administrator for both social security pensions and health insurance. On October 1, 2008, SIA functions dealing with health insurance were transferred to a new National Health Insurance Association. Meanwhile, contribution collections, pension payments, and record keeping functions for social security pensions remained with the SIA.

Establishment of the JPA will result in a 40 percent reduction in personnel from the current level at the SIA. Planned staffing of around 18,000—roughly 11,000 permanent and 7,000 temporary workers—will include transfers from the SIA and new recruits from the private sector. Agency staff will not be considered government employees, and those rehired from the SIA will lose their status as public servants. In addition, certain agency tasks are to be outsourced to the private sector, including screening application forms, staffing call centers, and conducting public awareness campaigns on social security.

To help regain public confidence in the nation's pension system, the MHLW has set up an expert panel to discuss ways to recover lost pension records, and it has allocated 177.9 billion yen (US$2 billion) for that purpose in its budgetary request for fiscal year 2010.

This article was extracted from the United States Social Security Administration publication International Update, November 2009.

Source: "Why the Big Fuss about SIA? Some Answers," The Japan Times, June 30, 2007; "Pension Record-keeping Problems in Japan," Institute of Economic Research, Hitotsubashi University (Tokyo), July 2009; "Pension Agency Job Interviews Delayed Due to Fears Over DPJ," Yomiuri Shimbun, September 14, 2009; "Govt to Ease Criteria for Pension Benefits/Claims to be OK'd unless Obviously Problematic," Yomiuri Shimbun, September 20, 2009; "Japan to Launch New Pension Agency, Abolish Prior Social Insurance Agency," Pension & Benefits Daily, October 13, 2009; "Action Needed Now on Pension Reform," Yomiuri Shimbun, October 20, 2009.

Implementation date: 01.2010