TEPCO considers cutting pensions to pay compensation

TOKYO —

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.

Japan Today

  • -1

    soldave

    So TEPCO is considering screwing its own workers for the company's own mistakes (direct or indirect cause). Bet they're ecstatic about that.

  • 0

    beangry

    "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."

    Why would any employee who worked for that company for 25 plus years agree to this? After all, pensions are a contractual thing people pay into over time; it is ridiculous for the management to try and steal money form the employees who saved it in their accounts. Of course, people at the top could give up their THEIR money; BETTER YET, why not ask the towns in Fukushima to use the millions of dollars they received from TEPCO over the years for allowing the plant to exist? They should have plenty, except for the fact they wasted most of it.

  • 0

    zichi

    I read TEPCO are trying to sell more than 200 buildings or properties, including its Tokyo HQ to help pay the massive compensation claims. It also intends to increase its power charges over the next three years by 15% to help bring it back to profit.

    Following the 3/11 nuke disaster, TEPCO "retired" about 20 of its top executives, including the former CEO which cost the company about ¥500 million. That divided by 20 makes ¥25 million each?

    I don't understand why this company is allowed to remain in business?

  • 2

    smithinjapan

    How much do you want to bet that it'll be all the hard working, honest employees of the company that get screwed with this while the execs decide to opt for a mere 10% pay cut for three months (if even that) instead of forfeiting their OWN pensions?

    These guys manage to find new lows all the time.

  • 0

    ADK99

    soldaveSep. 21, 2011 - 12:35PM JST

    So TEPCO is considering screwing its own workers for the company's own mistakes (direct or indirect cause). Bet they're ecstatic about that.

    The thing is, a company is just a piece of paper. It doesn't make mistakes, its employees do. I'm not saying that this is a good idea (or not) but the money has to come from somewhere or the company will be bankrupt. In which case the retirees will see their pensions cut anyway.

  • 0

    beangry

    That's right Smith, new lows all the time. For it was just the other day that they tried to reinstate executive bonuses, but were rebuffed by the govt. Let's not forget the censorship of info in those manuals...tepco..I mean, they must have been overcharging people for decades to have amassed 200 plus buildings. I'm no socialist, but i'm starting to wonder if utilities should be either non-profit or nationalised. Those billions in profits would easily lower bills and provide the govt with revenue to pay Japan's debt. Now they want to sell Japan's post office and tobacco (like they did with the trains under Nakasone), they won't have money for social programmes - ie YOUR retirement and medical.

  • -1

    Ramzel

    "The thing is, a company is just a piece of paper. It doesn't make mistakes, its employees do. I'm not saying that this is a good idea (or not) but the money has to come from somewhere or the company will be bankrupt. In which case the retirees will see their pensions cut anyway." Exactly. A company is a bunch of people working together to sell some sort of service or product. It is the management and employees that made the mistakes after all.

  • 0

    JapanGal

    This does not make any sense. The company TEPCO does not have control over the monies for the pensions. The employees pay 50% as does the company, in this case TEPCO. That is the long term payments. The short term payments are for health insurance. Cost less but both pay 50%.

    A different holding company controls the Pension funds. If that were not the case, then any company that files for bankruptcy would screw all of their employees. That does not happen.

    Look up on "How do Pensions" work.

    One thing TEPCO can do is from this day on, pay less out, but also collect less from each employee. If these employees vote to have the holding company tap into their pensions, then the people of this country have really shocked me with stupidity.

  • 0

    JapanGal

    For example...if any of you work for Japanese schools or private schools, there is a company called Shigaku Kyosai. They are a mutual Aid association and offer all sorts of things including extra nenkin, extra health insurance, cheap hotel accommodations nando. Maybe some one writing here can tell more about that.

  • 1

    The Munya Times

    How comes that TEPCO executives are still at large?

  • 0

    ExportExpert

    And tepco stoops to an even lower level, when will this scumbag of a compny be closed and its senior execs be tried for the crimes they have commited, this company is disgusting.

  • 0

    zichi

    TEPCO is/was the biggest, richest most powerful power company in the whole of Asia, with hands in many pies in many countries.

    There should be power generating companies which are separate from power supply companies so there is no monopoly and controlled power charges. Competition, would bring down the cost of the power charges which would benefit manufacturing and the private consumer.

  • 0

    Asagao

    I thought TePCO exec and their families had moved to Singapore.

  • 0

    marcelito

    What I,d like to see is the former ( I,d rather check into a hospital than deal with the Daiichi crisis back in March ) CEO Shimizu who apparently got a 500 million yen retirement package golden parachute to do the morally right thing and offer some or all of that money towards the evacuees compensation. Btw, from what I have heard, since Tepco had until now been charging us all its monopoly electricity rates , all of the Tepco employees have had very cushy pay / bonus/pension conditions over the past few decades...so I think if they cut something like 20-30% across the board like JAL , they could handle it. FFS..., in just the last couple of months we have learned that this company has been trying to stall the sale of its assets, applied to increase their electricity rates by 15%, tried to bring back full bonuses for its staff, handed out discouraging 60 page long compensation claim forms to the evacuees as well as wanting to pay clearly inadequate amounts to the evacuees ( what was it ...like 5 man yen for 4 months period till August per family I think? ) I,m sorry if I sound harsh, but if they can all share the riches in the good greedy times , they should all tighten their belts in lean times...Why should the taxpayers end up paying for it all? So far Tepco has been getting off mighty lightly.......

  • -2

    serendipitous

    If it means it will save (or help) TEPCO from going bankrupt and not being able to pay any money out, then they will have to do it. JAL did the same thing so it seems companies do have control of pension amounts paid for workers who have already retired. Bottom line is, don't rely on government pensions or company pensions. Make sure you have your own nest egg somewhere as well.....if possible!

  • 0

    gogogo

    That's illegal ... oh wait... this is tepco we are dealing with

  • 1

    JapanGal

    The pension contributions you have been paying in will have been going into a pension fund, and managed by Pension Fund Trustees. It is unlikely that this money has been fraudulently spent by your directors, and this money cannot be used legally to prop up the company by paying off debts with it. It is separately protected.

    Still read up on this. You will lose something due to fees, and if they are paying half your health etc., car insurance and a number of other things, you lose there, but your pension is yours.

  • 1

    cactusJack

    It will never pass the vote of the employees.

  • 1

    Christina O'Neill

    Will I ever see the headlines TEPCO executives take a voluntary salary, bonus and pension cut of 50 percent?

  • 0

    Cricky

    Would really NOT like to see a mass stranding of TEPCO management on a beach....who in their right minds would push them back into the water...it's radioactive and that might hurt their sensitive skin. And too many notes to read around the office.

  • -1

    hoserfella

    Nothing but a clumsy PR attempt by TEPCO to illicit a bit of sympathy from the Japanese populace. Nothing more, nothing less.

  • 0

    Samantha Zoe Aso

    I would think that sympathy for TEPCO is in short supply in any form in Japan.

  • 0

    gogogo

    Cut the salary's of the directors for 24 months... I'm yet to see any real action like this.

  • 0

    serendipitous

    JapanGal

    I thought so too but how did it work with JAL? I can't recall but maybe they asked their pension enrollees to accept a cut in their pensions? I remember it certainly did happen but I'm not sure how. If a company does go bankrupt, how safe are pensions even if they are managed by trustees? I doubt they really are 100% safe unfortunately.

  • 2

    Mirai Hayashi

    what a crooked organization. Make the low level workers pay for the mistakes of the executive while the executive continue to receive lavish wages! Sounds so much like wall st. vs. main st. in the states

  • 0

    sfjp330

    The gap between assets and liabilities for TEPCO may be of considerable size, and they cannot pay all the liabilities immediately. TEPCO might be considering, among other options related to a restructuring, filing for bankruptcy protection or some sort of specialized government-backed bankruptcy protection. That way, TEPCO could slash its debt and seek concessions from the pensions of employees, including cuts in its retiree-health obligation.

  • -1

    NetNinja

    TEPCO seriously. Cut it all. The President of TEPCO should sell all those BMWs and Benzs, company cars. Remove the snack machine from the lunchroom as well. Everything must go!!!!

    Yes, Mirai, it' is crooked indeed but a necessary sacrifice for that is the Japanese way. All must take responsibility and bow....Gomenasai....plus "ishario" money. Their families must pay too. College money, no more school trips, no more Shabu Shabu. Tarako spaghetti forever.

    Why so extreme? Dude, they destroyed part of a nation!!! They amputated a whole region of Japan. When it comes to nuclear safety they like literally lowered the bar. What they did was a step shy of a nuclear impact. This nation was traumatized in a way that all the compensation TEPCO could ever offer wouldn't heal Japan.

    I still shocked to see that the top officials in TEPCO haven't committed suicide yet. I truly hope the press follows these guys around December so you can get a picture of them going in for Bonenkai with big fat bonuses.

  • 0

    jforce

    Have to agree with the outrage here. At a loss for words.

  • 0

    Elbuda Mexicano

    The more I know about Tepco the more sick I get!! Bastties!!

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