It is probably time to rethink Japan's pension system, designed as it was for an era when full-time homemakers were the norm.

The labor ministry is moving to abolish the so-called "1.06-million-yen wall," the income level where many part-time and short-hour workers gain coverage under -- and must begin paying into -- Japan's Employees' Pension Insurance system. Specifically, employees who work 20 hours or more per week at companies with over 50 staff and earn approximately 1.06 million yen or more annually must join the system. This has led many to restrict their work hours to stay under the threshold.

The ministry plans to scrap the income and company-size requirements, allowing people to work without concern for these limitations. And while enrollees would need to pay pension premiums, they would benefit from increased financial security in retirement. However, since the 20-hour-per-week requirement will remain, some work restrictions may persist.

To address this, the ministry has proposed that companies shoulder part of the premiums. This shift places additional responsibility on businesses seeking workers, but it could also impose financial strain on smaller firms with fewer resources.

Meanwhile, in workplaces where employees do not qualify for Employees' Pension Insurance, earning more than 1.3 million yen annually disqualifies them as dependents under a salaried spouse or guardian's insurance plan, forcing them to pay premiums under the National Pension system. This threshold is called the "1.3-million-yen wall."

By keeping their income below the threshold, individuals can qualify as "Category III insured persons," receiving National Pension benefits without paying premiums -- a system originally designed to support full-time homemakers.

In fiscal 1995, there were 12.2 million Category III beneficiaries, but the number has since nearly halved as dual-income households have become more common. This has fueled perceptions of unfairness among working women and criticism that the system discourages workforce participation. Calls for its abolition have grown from both labor and management.

The labor ministry hopes to reduce the number of Category III beneficiaries by expanding enrollment in the Employees' Pension Insurance system. However, this is not a fundamental solution. Serious consideration should be given to abolishing that category itself.

That said, there are people who cannot work due to illness, child care or caregiving responsibilities. If abolition is pursued, it will be critical to establish a framework to support these individuals in their retirement.

A broader discussion is needed to design a pension system that reflects the realities of modern society.