So, you want to know all about the Japanese pension system. Whether you’re doing research before coming to Japan or you’ve just now decided to find out what is going on with that money being deducted from your monthly salary, don’t worry. The official explanations for this stuff can be a bit dry and poorly translated, but this easy breakdown should make things clear to even the most numerically challenged reader.
In order to keep this simple, there are two categories most people fall into when it comes to pensions:
A person who is self-employed, works part-time or works at a company that is not insurance applicable because it has less than five employees.
- A person who works full-time, or three quarters of what is considered full-time at that company (e.g. 30 hours a week or more, if the ordinary working hours per week are 40 hours).
What is the Japanese pension system?
There are two types of nenkin (pension) into which all workers in Japan, including foreigners (on temporary working, spousal or permanent residence visas), must enroll. This fund is managed by the Japanese Pension Service, a government organization run by the Ministry of Health, Labor and Welfare. The plan that you pay into depends on the type of work contract you have.
The kokumin nenkin, National Pension plan (国民年金)
The kosei nenkin, or employee’s pension insurance plan (厚生年金)
The main difference is that people in category one will pay more in pension contributions but will also get a bigger pension payout in the future. This is because their company matches their payments, yen for yen, each month and adds to their pension pot. If you are paying into an employee pension you can also choose to pay into the national one, as well, in order to get more once you retire.
After you enroll in one of these schemes you will receive a nenkin techo (年金手帳), or pension hand book. It is important to keep a hold of this as you will need it any time you want to interact with your pensions. If you lose it, you can of course apply for a new one, but it’s worth emphasizing that it is best to have the original.
What do I have to pay?
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