News

Pension payments to retired employees of financially troubled Japan Airlines are as high as 480,000 yen per month, according to a model case detailed in internal government documents.

The 480,000 yen payments vastly outstrip All Nippon Airways' top pension allowance of 310,000 yen per month.

JAL is currently aiming to restructure under the management of the Enterprise Turnaround Initiative Corp. -- a public-private venture created to rebuild troubled companies -- with an injection of new capital including public funds. However, taxpayers look to be strongly opposed to putting public funds into JAL as long as the generous pension plan stands, which is likely to pressure the airline to reduce the monthly payouts.

Monthly JAL pension payments would reach 480,000 yen in cases where an employee took a 17 million yen retirement bonus option, and thereafter received 250,000 yen in company pension and 230,000 yen in public pension. If an employee took the maximum retirement bonus of 36.5 million yen, he or she would only receive the public pension amount.

With around 16,000 current employees and 8,500 retirees, JAL now faces a retirement bonus and company pension shortfall of some 304.2 billion yen.

As a prerequisite for public investment in the airline, JAL intends to reduce the pension load. However, under Defined Benefit Corporate Pension Act regulations, to reduce pension payments the company must get the assent of two-thirds of pension recipients, which looks to be a difficult task.

The government is currently looking at enacting a special law to reduce the pension amounts, but any such move would face serous hurdles, as it could be seen as violating property rights guaranteed under the Constitution.