20 per cent drop in payouts estimated . . .
The Japanese labour ministry announced its projections for the public pension system on Tuesday, raising concerns over the projected drop in payout levels. According to the ministry, the pension-to-wage ratio will drop from 61.7 to 50.8 per cent by 2047, resulting in a 20 per cent drop in payouts for an average household within 30 years. In response to the new projections, Chief Cabinet Secretary Yoshihide Suga announced that the government is considering a revamp of its pension system to ensure its long-term sustainability.
Aging populations stress Asia Pacific Economies . . .
The aging of the population in Japan has added stress to its national pension fund as it tries to support an increasing number of retirees with fewer workers. But this problem is not limited to Japan. Many Asian countries, including South Korea, China, and Singapore, are facing the same issue. Some governments in the region have begun discussions on raising the retirement age and delaying the start of pension payouts. Singapore, for instance, recently raised the retirement age for its civil servants by one year to 63, with the plan to raise it to 65 by 2030.
Challenges for Canada . . .
Canadian pension plans are also grappling with the challenges associated with an aging population in Canada. Today, there are 6.4 million senior Canadians who make up 17 per cent of the total population. By 2030, there will be more than 9.5 million seniors, representing 23 per cent of the population. While the Canada Pension Plan (CPP) is projected to be sustainable for at least the next 75 years, the Canadian government has implemented policies to minimize stress on its pension funds. For instance, retirement beneficiaries who remain employed can continue to contribute to CPP through the Post Retirement Benefit program.