Welfare Minister Hakuo Yanagisawa told a press conference on Friday evening that he would replace Social Insurance Agency director-general Kiyoshi Murase and Vice-Welfare Minister Tetsuo Tsuji. Mr Tsuji is the administrative vice-minister at the Welfare Ministry, which oversees the agency.

Mr Murase will be replaced by Mr Taiji Banno, a former career bureaucrat who now sits on the board of Japan Broadcasting Corporation.

The new Vice-Welfare Minister will be Mr Takeshi Erikawa, a former vice-minister at the Cabinet Office and currently an adviser at Nikko Financial Intelligence.

The changes, which will become effective on Aug 31, come after the Social Insurance Agency admitted it had lost some 50 million payment records due to years of mismanagement.

As a result, the Japanese are worried that they may not receive the pensions they are entitled to.

The mismanagement of pension records was seen as a major factor in the ruling Liberal Democratic Party's massive defeat in the July 29 Upper House elections.

'When thinking about the pension record problem and the complete reform of the Social Insurance Agency, we should not just promote people from within...I felt it would be more appropriate to have fresh sets of eyes to look at the administration,' Mr Yanagisawa said on Friday.

AFP