The ongoing scandals at the Social Insurance Agency make us wonder if the Kasumigaseki district of government bureaucracy is a bottomless morass of immorality.

A recent investigation by the Ministry of Health, Labor and Welfare has revealed that the accounting division of the Social Insurance Agency systematically managed huge fees that agency officials received from contractors for checking books and videos.

It has also been discovered that about 100 agency officials received gifts and entertainment from private companies whose senior executives have been indicted on bribery charges.

The ministry in autumn 2004 said agency officials had received checking fees totaling 750 million yen over five years. The ministry said the funds were pooled in each division and denied any systematic involvement in managing the money.

But just three months later, a further investigation showed that claim to be false.

The agency is in charge of the pension system, which can be maintained only if the public trusts it.

It is natural that the ministry has responded with severity, including reprimands for agency officials who received gifts and entertainment from companies.

Yet we are still concerned about the extreme sloppiness of the welfare ministry's initial investigation.

An increase in the rate of nonpayers to the pension plan for self-employed individuals, wasteful spending and unfriendly services were exposed to the public. The agency's operation came under fire when pension reform was a key political issue.

The government also established an advisory panel of experts to fundamentally review the reform plan. However, such efforts soon ran into obstacles.

There are 17,500 agency officials throughout the country. They collect and manage premiums for company employees' pension programs, the pension plan for the self-employed, and the government health insurance system. The agency also disburses pension payments.

Since it has become clear that the welfare ministry appears incapable of controlling its affiliated agency, the current organization must be changed.

Unfortunately, the agency is now simply associated with incompetence. There is no choice other than to implement harsh, radical measures to regain public confidence in the system.

The government should consider separating the agency from the welfare ministry. The agency should then be dismantled and its operations split into medical insurance and pension management.

The government health insurance system should be reorganized so that management would be entrusted to individual prefectures, in line with medical reform proposals.

Meanwhile, the National Tax Agency could take over the Social Insurance Agency's pension premium collection services and run them along with its present mandate of collecting taxes.

Some critics say that experience in collecting taxes would not necessarily help in collecting pension premiums because they are two separate things.

However, there are benefits in merging the two collection agencies. Taxes and pensions are collected together in the United States, Britain and Sweden. The main opposition party, Minshuto (Democratic Party of Japan), has also proposed establishing such a combined revenue agency.

The government advisory panel is considering making the Social Insurance Agency an independent administrative body to ensure it is responsible for its operations and effective management. However, such a plan would raise criticism that the government is simply changing the name of the same entity.

The government must keep in mind that to regain public trust in the pension system, it is essential to fundamentally reform the programs and make collection more effective and easy to understand.

--The Asahi Shimbun, Jan. 15(IHT/Asahi: January 22,2005)