The government and the ruling parties on Wednesday approved a public pension-reform plan that will increase premiums paid by workers and cut their benefits over the coming decades.

The plan, which will take effect in fiscal 2004, is aimed at countering the withering effects of the nation's aging society on its pension system.

Salaried workers' premiums will be gradually increased from the current 13.58 percent to 18.35 percent of their annual income by 2017.