Estimate of Additional Funding Needed to Forego Macroeconomic Indexing of the Basic Pension

2008年05月20日

(Kunio Nakashima)

The National (Basic) Pension faces key issues not only on the funding side—most recently regarding tax-based funding—but on the benefit side as well. We argue that the rationale for macroeconomic indexing of benefits is weak, and estimate that its removal would require additional funding of five trillion yen per year, the equivalent of a 2-percentage point increase in the consumption tax rate.

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