On January 19th, 2024, the MHLW released details of the pension benefit amounts for 2024. You can see the press release [here](https://www.mhlw.go.jp/content/12502000/001040881.pdf). For reference, you can see the previous year’s release [here](https://www.mhlw.go.jp/content/12600000/001076695.pdf).
For people aged under 68, pension benefits move in line with average wages (minus the macroeconomic slide), which will mean an increase of 2.7%, whereas for those aged over 68 benefits increase in line with inflation minus the macroeconomic slide, which will mean an increase of 2.8%. For reference, the macroeconomic slide includes a -0.1% adjustment for the change in the number of pension benefit recipients, and a -0.3% adjustment for the increase in the average life expectancy.
“But there’s no way to know how much pension payouts will increase by the time I’m old! The government increases and decreases payouts randomly!”
Nope, by law pension payments increase by the rate of wage increases for those under 68 and by inflation for those over 68. You might have noticed the government’s push for increasing wages and sustainable inflation of over 2%.
“But that just means I’ll have to pay more in pension premiums!”
For example Kokumin Nenkin premiums will increase by 460 yen in 2024, yet the payout amounts will increase by 1,750 yen.
“But the pension system is bankrupt! And it’ll be even more bankrupt by the time I’m old!”
Current pension payouts are covered 100% by pension premiums and tax. In the future, it is estimated that 10% of pension payouts will come from the GPIF, the largest pension fund in the world, which invests in Japanese bonds, foreign bonds, Japanese stocks and foreign stocks at a rate of 25% each. From 2001 to 2023 it has had a compound annual growth rate of 3.91% and currently stands at a whopping 126.6 trillion yen and growing. You can see the details [here](https://www.gpif.go.jp/operation/the-latest-results.html). Even when money starts to be taken from the GPIF, 90% of the payouts will be covered by tax (roughly 20%) and insurance premiums (roughly 70%).
“But the pension system is not insurance! It’s a scam! Pension payments are theft!”
Ok, that’s nice, thank you for your comment. Have a nice day! ☺️
by fiyamaguchi