The December 2016 amendment of the Employees’ Pension Act, which was intended to expand its purview to part-time workers, introduced a new, tighter, wage requirement. We have examined whether this requirement is consistent with former conditions, how many low-wage part-time workers are actually excluded, and whether this expansion can be expected to have a ripple effect on the levels of future employees’ pension benefits (the replacement rate).We present three main findings. First, the new, tighter wage requirement changes the reference point from a minimum wage to a balance between contributions and level of benefits for the national pension. This is a change from former requirements. Second, the new requirement excludes a large number of low-wage part-time workers ; their number is almost equal to the number that would gain coverage if the expansion of eligibility were to be applied to all work places. Third, further substantial expansion would cause a decrease in the mean wage levels of insured workers. As a result, the level of current pension benefits (the replacement rate), which is linked to the mean wage growth, may also decrease. This side effect can be exploited to improve the fiscal balance between current and future beneficiaries.
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