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	<< Back "DAWN" Newsletter of The DAWN CENTER WOMEN AND PENSIONS Toshiko Uchimura Public Consultant on Social and Labor Insurance 1. Outline of Japan's Pension System Japan's pension system is broadly classified into two types: the National Pension, in which self-employed workers participate, and Employee's Pension Insurance, in which salaried workers participate. The National Pension Program provides annuities to the workers who have paid monthly prescribed premiums and the pension is decided according to their participation period. The Employee's Pension Programs fix the premiums in proportion to the worker's salary and his company also pays an amount equivalent to the workers' contributions. The members of the Employee's Pension Programs are simultaneously supposed to be members of the National Pension Program. Therefore, they are provided pensions according to premiums paid in proportion to their salary, as well as their National Pension benefits. 2. The Present Status of Pension System Japan's pension system is organized not on the basis of a person but on the basis of a household. That is to say, the system is schemed on the model of a full-time high-salaried male worker, on the presumption that the household head supports his family. Accordingly, the eligibility for participation and the sum of annuities are decided according to men's salary and the period of their payment of premiums. As dependent spouses, women are supposed to have the rights to receive an allowance added to their husbands' pensions. 3. Way of Working Decides the Pension The difference in way of working is reflected in the disparity of wages between men and women. Chart áT shows the differential in prescribed wages between men and women in fiscal 1999. Chart I shows the classified monthly pension of men and women among those newly qualified for the Employees' Pension Insurance in fiscal 1999 who had paid premiums for more than 20 years. Chart II and II indicate that men's salaries rise as long as they keep working, and they pay high premiums of the Employees' Pension Insurance for a long time. In contrast, the charts show that most women resign at least once for the reason of marriage, childbirth and childcare, and afterward, begin to work again as low-waged workers such as part-timers, while taking care of their family. Thus women's low wages and short working period lead to the small amount of their benefits. 4. Pension System Encroaches upon Women's Independence Japan's pension system provides full-time housewives with various privileges. Salaried workers' wives whose annual income is under 1,300,000 yen can obtain qualification for the National Pension without paying premiums, and, after their husbands' death, they get part of their husbands' pension in proportion to their husbands' salary as the Survivors' Pension. As a result, dependent wives who have not paid their premiums (see Chart III(4)) can sometimes receive more benefits than those who have worked and paid premiums for a long time (see Chart III(1)(3)). Finally, Chart III(5) shows a woman also gets a very small pension though she has paid premiums to the National Pension for a long time because she cannot get the Survivors' Pension if her husband was a self-employed worker. Thus, in the pension system based on household unit, women are in a financially more advantageous position when they remain their husbands' dependent family members. That is to say, the pension system itself prevents women from working independently in society. That results in women's limited right to receive benefits and it is linked to small social security benefits in their old age. Moreover, if they divorce late in life, they will be kept in an uneasy, financially miserable situation. CHART I : Standard worker's prescribed monthly wage,year-on-year rate and the wage gap between men and women according to age. (all industries,all scales of enterprises,all education levels)" Age Group Prescribed monthly wage amounts (1,000 yen) Year-on-year rate (percent) Wage gap between age group (20-24=100) Wage gap between men and women (men=100)   Women Men Women Men Women Men total 217.5 336.7 1.2 0.1 117.3 165.9 64.5 under 17 138.2 138.2 3.6 -11.5 74.5 68.1 100 18-19 157.5 170.9 0.5 -0.1 85 84.2 92.2 20-24 185.4 202.9 0.7 -0.2 100 100 91.4 25-29 210.6 245.2 -0.3 -1 113.6 120.8 85.9 30-34 234.5 300.4 0.1 -0.7 126.5 148.1 78.1 35-39 241.8 349.5 0.5 -0.1 130.4 172.3 69.2 40-44 238.9 385.7 2.3 -0.4 128.3 190.1 61.9 45-49 235 411.9 1.5 -0.5 126.2 203 57.1 50-54 232.6 428.8 0.9 -0.8 125.5 211.3 54.2 55-59 223.6 402.5 2.2 0.3 120.5 198.4 55.6 Source:Ministry of Health,Labor and Welfare,Basic Statistical Survey on Wage Structure,1999. CHART II : Employee's Old-Pension Insurance CHART III : Women's Working Situation and Pensions On conditions that: * Both the husband and the wife,born on the 1st of April,1950,employed after graduating from junior college. * The husband works until the retirement age of 60. * His average index monthly earnings are 400,000 yen and hers are 250,000 yen. * Both of the two are employed as of the 1st of April,and are retired as of the 31st of March.   Women's Working Situations Yearly Pension Benefits over the age of 65 Yearly Pension Benefits after the death of her husband Wives'Premium Payment Periods (1) a full-time worker,single, until the retirement age of 60 Old-Age Pension 1,659,200 yen Old-Age Pension 1,659,200 yen 40 years (2) a full-time worker,who married at the age of 25,and left work at the retirement age of 60 Old-Age Pension for the wife 1,659,200 yen for the husband 2,172,200 yen Old-Age Pension 804,200 yen deceased spouse's Survivor's Pension 1,192,000 yen Total 1,996,200 yen 40 years (3) quit her job at the age of 25 because of childbirth and went back to work at 40,then continued to work until the retirement age of 60 Old-Age Pension for the wife 1,117,400 yen for the husband 2,172,200 yen Old-Age Pension 583,000 yen deceased spouse's Survivor's Pension 1,146,700 yen Total 1,729,700 yen no premium paid during the period of retirement because of childbirth until the re-employment 25 years (4) a full-time housewife,who left work because of child-birth at the age of 25 Old-Age Pension for the wife 773,200 yen for the husband 2,172,200 yen Old-Age Pension 666,300 yen deceased spouse's Survivor's Pension 1,146,700 yen Total 1,813,000 yen no premium paid after retirement because of childbirth 5 years (5) a self-employed worker,who got married to another self-employed worker at the age of 25 Old-Age Pension for the wife 804,200 yen for the husband 804,200yen Old-Age Pension 804,200 yen 40 years Source:Ministry of Health,Labor and Welfare.Basic Statistical Survey on Wage Structure,1999. 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