Japan’s Pension Problems

In the spring of 2007, news broke that Japan’s Social Insurance Agency, which administered the country’s public pension system, was unable to match more than 50 million records to premium-paying citizens. The problem stemmed from the agency’s mishandling of the merging of a patchwork of pension systems into a single one in 1997. The incident revealed problems with the digitization of pension records, ineffective mechanisms for collecting contributions, and incompetence on the part of the agency’s staff. It led to widespread public outrage, contributed to the opposition party taking control of the upper house of the Diet, and significantly lowered the approval ratings of Prime Minister Shinzo Abe, who resigned not long after the upper house vote.

On June 1 of this year, Abe, who was reelected in 2012, was once again forced to confront a problem with the management of Japan’s pension system. The Japan Pension Service (JPS), the organization that was created in response to the earlier incident, announced that, as the result of a computer virus, personal data, including names, birthdates, pension numbers, and addresses for more than 1.25 million individuals were accidentally made public. Estimates suggest that, so far, 52,000 individuals had all four types of information leaked, and in parliamentary questioning last Wednesday, JPS President Toichiro Mizushima expressed his concerns that the number of affected individuals could grow.

Although history is unlikely to repeat itself—unlike in 2007, the opposition is too disorganized to use the data leak to pressure the prime minister—this revelation could nevertheless be a serious political problem for Abe at a time when he can ill afford it. His government is already engaged in a major parliamentary fight over revisions to Japan’s national security laws and preparing for the potentially controversial decision to restart a pair of offline nuclear reactors later in the summer.

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