I see dead people: They collect pensions in Japan

In the 1998 movie Waking Ned Devine, an elderly Irish pensioner wins the lottery and instantly dies, ticket in hand, of a heart attack.  The townspeople concoct a scheme whereby one of them will pretend to be Mr. Devine in order to collect the lottery winnings, which will then be shared by all the inhabitants of the town.

Why do I bring up an obscure movie from 12 years ago?  Because an article I read in the Financial Times reminded me of it. After nearly 20 years of economic malaise in which Japanese citizens have seen their wealth slowly seep away, there has been a large increase in pension fraud.  The Japanese have one of the longest average life expectancies in the world.  But perhaps their census takers should take a closer look at some of the 100+ crowd.  The FT writes,

Next week marks the start of Japan’s Obon holiday in which families take time off to pay respects to their ancestors, a tradition conveying the importance Japanese families attach to their deceased relatives. But some have been clinging on to their ancestors’ memories and pensions rather too assiduously.

In one case, the corpse of a man who would be 111 years old was kept in a Tokyo house for nearly 30 years. The authorities are reportedly investigating his family on suspicion of pensions fraud and negligence.

The Japanese press has since tallied nearly 60 instances of centenarians registered with local authorities to receive pensions but whose whereabouts is unknown. The macabre findings have refocused attention on the ability of the Japanese government to cope with its ageing population, particularly its capacity to pay their pensions.

From “Respect Your Elders,” The Financial Times, August 6, 2010

Desperate times call for desperate measures.  Traditional Japanese religions involve ceremonies of ancestor worship, and even as the traditions have waned the respect has remained.  So, it’s telling of how truly bad the situation in Japan has gotten when normally respectful Japanese engage in this kind of behavior.

Around the world, as Baby Boomers enter their retirement years with insufficient funds, the temptation will be there to engage in similar forms of Social Security and pension fraud.  Don’t be surprised to see stories like these in Japan pop up in  your local newspapers.

Charles Lewis Sizemore, CFA
Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy

Read the original story at H. S. Dent