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No.86(2012/3/26)
Government Submits Bill to National Diet
Aimed at Realizing Continued Employment until 65
by Revising Act Concerning Stabilization of Employment of Older Persons
On March 9 the government submitted a bill to revise the Act Concerning Stabilization of Employment of Older Persons to the National Diet after it had received approval at a cabinet meeting. From the perspective of ensuring a linkage between employment and pensions, the revision bill is aimed at realizing a society in which all people who wish to do so can continue working until 65 years of age.
The bill is based on a report submitted by the government's Labour Policy Council, a tripartite panel consisting of representatives of labour, management, and public interests. The current law stipulates that the mandatory retirement age is 60 years or over and obliges employers to guarantee employment until 65 by lifting the retirement age, introducing continued employment schemes, or taking other steps. The reality, however, is that most companies have introduced a continued employment scheme under which employees retire when they reach the age of 60 and then are reemployed by the company from the following day. In the case of reemployment, wages after the age of 60 often drop by as much as 20%-40%.
The main point in the proposed revision is that the clause in continued employment schemes stating that "the setting of criteria for eligible persons shall be conducted through a labour-management agreement" is to be abolished. Because of this clause, there are many people aged 60 or over who cannot work even though they wish to do so because they do not meet the set criteria. After the abolition of this clause, it will become possible for people who wish to do so to continue working until the age of 65.
Amid the advancing aging of society, the government has already decided to increase the age at which people can begin receiving employees' pension benefits in phases from April 2013. If the setting of criteria for people eligible to continue working remains as it is, therefore, there is concern that the number of people receiving no pensions and no income after the age of 60 will increase sharply.
RENGO (Japanese Trade Union Confederation) is making the utmost efforts to have the bill to revise the Act Concerning Stabilization of Employment of Older Persons enacted in the current session of the Diet so as to realize a society which enables people who wish to do so to continue working until 65 and does not create any people receiving neither a pension nor an income.
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