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Local retirement pensions caught in budget shortfalls

Date Posted: 2006-12-18

Many Okinawans retiring from government agencies across Okinawa may find themselves without their promised retirement allowances.

A new report from the Prefecture Municipalities Comprehensive Business Union, which manages pension plans for 38 Okinawa cities, towns and villages, says it is running out of money. The organization says it will have a deficit from what is collected from cities, towns and villages, and what it must pay out next year. A PMCBU official says many baby boomers will begin retiring next year, draining the accounts.

The PMCBU says it will increase the burden levied on supported cities, towns and villages from the current 18% to 20% beginning next April. The complex calculations are based on economic conditions and sums required to be paid as part of pensions. Aside from the 38 municipalities, some 60 business groups want to join the PMCBU. Okinawa, Naha and Ginowan Cities are not part of the PMCBU, and operate their own retirement pension funds.

Retirement shortages are expected to begin next year, and jump sharply in 2009, when retirements are projected to increase heavily. Shortages of 3.7 billion, 5.3 billion and 5.6 billion are projected for the coming three years.

A PMCBU official says the shortfalls will be offset this year by 21.1 billion in reserves. Those reserves will dwindle quickly, as approximately 775 people are forecast to retire by 2012. The PMCBU will have to use general resource and balance funds, as Naha, Ginowan and Okinawa Cities do.

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