Saturday, August 11, 2007


Aug. 12, 2007 (The Yomiuri Shimbun delivered by Newstex) --

The Social Insurance Agency is facing fresh criticism over its plan to spend hundreds of millions of yen on a new computer system to solve the pension fiasco caused by the agency's sloppy management of premium payment data, according to government sources.

The agency plans to introduce the new computer system to analyze about 50 million premium payment records, the policyholders of which cannot be identified due to careless handling of the data over many years.

But the agency is already leasing a computer system from private companies to manage public pension data and has been shelling out about 100 billion yen annually.

If the agency introduces the new system to address the pension problem, it will entail hundreds of millions of yen in new expenditure.

Therefore, members of a committee set up under the Internal Affairs and Communications Ministry to check the agency's work and management of the public pension system, voiced doubts about the envisaged scheme, questioning whether the new computer system is really necessary.

In February, Prime Minister Shinzo Abe ordered the agency to investigate the failure to properly manage the pension premium data.

On July 5, the government and ruling parties announced their intention to clarify all 50 million unidentified records by March next year, and to integrate them into other records after checking them against those of pensioners and policyholders.

However, the agency has merely sorted the identified records by age and pension scheme--national pension or employees' pension--using its current computer system.

When the committee asked in late July how the work was progressing, senior agency officials, including Director General Kiyoshi Murase, replied that the details of the unidentified data had not been sufficiently checked.

As a reason for the slow progress, an official of the agency's planning division said, 'It's extremely difficult to handle tasks such as excluding the names of those who are dead or who have left the pension schemes from the 50 million records, while carrying out our usual work with the existing computer system.

'So we're preparing to introduce a new computer system exclusively to analyze the records, which won't hamper our usual work.

'To resolve the problem, we'll ask private companies for their opinions to help us analyze the records and develop new computer software,' the official added.

The agency has lease contracts for the current computer system with NTT Data Corp. and Hitachi Ltd. (NYSE:HIT) , and has paid about 1.4 trillion yen in leasing fees to the companies and their group firms.

All the money has come from a pool of public pension premiums.

Though the planned new computer system will be smaller than the existing one-- which handles 300 million pieces of information related to the public pension, it is likely that it also will be leased from private companies, resulting in expensive additional lease fees.

As for the cost of introducing the new system, the agency division said it wanted to avoid using money derived from pension premiums as far as possible, by cutting other costs and using bonuses returned by its employees to cover the shortage.

But members of the committee have voiced doubts and criticism. One member asked whether the new system was really necessary, and another said they had not heard about it, adding that many members of the public are still anxious about their pension records, arguing that if the agency needs to introduce such a new system, it should reveal its plans to the public.

Central Japan Railway Co. Chairman Yoshiyuki Kasai, who chairs the committee, said, 'I'll wait for a formal explanation from the agency at our next meeting to be held on Aug. 23.'



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