TEPCO considers cutting pensions to pay compensation
Tokyo Electric Power Co (TEPCO) is considering cutting the pensions of employees and retirees in a bid to raise funds for compensation to be paid to those affected by the crisis at the stricken Fukushima Daiichi nuclear plant. TEPCO Chairman Tsunehisa Katsumata said Tuesday that the move may be necessary depending on the findings of the government panel currently examining the utility’s assets.
Katsumata said that the nature of the cuts would be decided after consulting with the panel and looking at TEPCO’s current financial situation and outlook, Jiji Press reported. The reductions may take the shape of interest rate cuts, Katsumata added.
TEPCO is facing massive compensation claims, expected to total several trillions of yen. As part of the compensation plans, the government will pitch in an initial 2 trillion yen in the form of special government bonds to help the utility.
The Diet in early August, passed a law to create a state-backed entity that would help TEPCO pay the compensation bill for the disaster. The government has agreed to help TEPCO compensate evacuees and other victims, conceding in the law that the state is partly responsible because it has promoted nuclear energy for decades.
The government panel, formed last week and headed by lawyer Kazuhiko Shimokobe, is tasked with monitoring TEPCO’s cost-cutting efforts and evaluating its financial assets to prepare for the forthcoming compensation payouts which are due to start in October.
Shimokobe said that pension cuts were not raised during the panel’s first meeting, but would be included in future discussions, Jiji reported.
According to Japanese law, TEPCO needs the approval of two-thirds of its retirees and current employees who are paying pension premiums in order to slash premiums.