Japanese old age population is gradually increasing and this tendency weakens economic conditions of Japanese welfare annuity system. Therefore it is important for us to study future conditions of this system.This model contains 4 sectors: Demography, total premium income, total pension expenditure and reserve of the welfare annuity system.The demographic sector covers populations of 5 three-year age groups under 14 years of age and 13 five-year age groups above 15 years of age. This sector was first formulated for a simulation model of dental diseases and is now applied to this model. Total premium income for the welfare annuity system is the sum of premiums of workers, employer contribution and government contribution, for which populations of five-year age groups are used. Total pension expenditure is the sum of base pensions and earning related pensions. Here is used population of 60-64 age group. Total premiums plus interest income of the reserves of the welfare annuity system minus total pension expenditures flow into the reserves of the welfare annuity system.The length of the simulation is 63 years from 1963 to 2025.This study is a research project of the Japan Productivity Center.