Japan's Abe in hotseat after pension report highlights income-savings gap

Japanese Prime Minister Shinzo Abe faced stiff opposition criticism on Wednesday after a report warned that many retirees won’t be able to live on pensions alone, a topic likely to become an issue in an election for parliament’s upper house.

Abe has made reform of the social security system a top priority to cope with Japan’s fast-ageing, shrinking population.

But the furor over the report and Finance Minister Taro Aso’s refusal to accept its findings have set back Abe’s coalition as it prepares for the upper house poll amid speculation that the premier may also call a snap election for the more powerful lower chamber.

A report this month by advisers to the Financial Services Agency (FSA) said a model case couple would need $185,000 in addition to their pensions if they lived for 30 years after retiring.

The report, which Aso has refused to accept, was meant to highlight the need to plan ahead for retirement. Instead, it gave opposition parties ammunition to blast Abe’s government.

“What is making lots of people angry is that you are simply stressing stability (of the system) and not addressing their anxiety head-on,” Yukio Edano, leader of the largest opposition Constitutional Democratic Party of Japan, told Abe who appeared before a parliamentary panel.

Abe said the report had caused “misunderstandings” and he reiterated the government’s position that reforms to the pension system implemented in 2004 had ensured its sustainability.