|November 18, 2004
AARP Reinventing Retirement Conference, London, UK
|How Much More Work Is Enough? Views on Retirement Age|
|Hiro Murata, Founder and President, Murata Associates, Japan
Japan is the most 'ageing' society in the world. The mandatory retirement age is 60. This will changes; but much also depends on whether people have to work or want to work.
There are two views; that people will have to work, because disposable incomes, pension assets and the pension system will be insufficient. But if it is difficult to find employment opportunities, there is a problem. Disposable income per household falls quite fast over the age of 60. On 3 June 2004, the Pensions Reform Act was passed, which reduces the size of pensions in the future, and increases the cost burden to the younger generations. As a result, the young feel they have been done an injustice and have become angry. Some are looking for a strong organization to represent their interests.
The ageing ratio is the reason for changing policy. Japan is the most rapidly ageing society in the world, with the highest proportion of over 65s; by 2020 they will be 25 percent of the population. The rise since 1990 has been even faster. The baby boomers, who in Japan are defined as being born between 1947 and 1949, show a strong peak in population, and in 2010 they will be over 60. The Older Employees Act of 2004 was passed to change the mandatory retirement age for 65, although there is some room to modify the rule in action, and the cost burden to companies is recognized.
The trend to want to work is new: this is for reasons of social engagement, to keep healthy, and self-actualization, the last being a trend that is getting stronger. In a survey of Japanese 'baby boomers', nearly 50 percent want to go on working, and the most important reasons were that they enjoyed work and that it kept the social bond. However, in business, there are low incentives from the pension system (as pension benefits reduce for wage earners), and there are few opportunities for older people to work. The project now is to create options, but how? The last Japanese election was the first where pensions policy was a discussion point.
→ Read Summary of the Conference.
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