lifestyle

Understanding the Japanese pension system Part 2: What will I pay?

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By Alfie Blincowe

Calculating the amount you pay into the Japanese pension scheme while working in Japan — and what you will be entitled to receive — can be tricky, but not impossible.

In part two of our “Understanding the Japanese Pension System” guide, we will cut through all the jargon and intimidating math to clearly show how the pension plan will affect you and your monthly take home pay.

Pension contribution amounts

People who come from overseas to live and work in Japan follow all sorts of career paths. Some see them working for just a couple years or more, others see them leaving and returning while still others see people settling in the country to make their homes and raise families.

Due to the vagaries of employment and its incumbent social insurance benefits, it can be hard to separate the wheat from the chaff, so to speak, and figure out exactly how much you should be paying into the Japanese pension system.

We’ve managed to break it down into four example situations — one of which should apply to almost anyone working here — followed by some easy-to-understand explanations of how the sums are worked out where applicable.

Example 1: If you contribute to the national pension plan for less than three years.

A person who is self-employed, works part-time or full-time at a company that is not insurance applicable with less than five employees and only pays into the kokumin nenkin (国民年金), or national pension, as explained in part one of this series.

You will pay…

¥16,340 per month toward your pension, like everybody else who pays into the national pension.

You can receive…

A lump sum payment of everything you paid into the system for the past three years (you cannot reclaim any payments totaling more than three years) or have credit for your pension contributions paid in Japan added to the record of the national pension in your home country if that country has an agreement with Japan (list of the 14 eligible nations here).

Click here to read more.

© GaijinPot

©2018 GPlusMedia Inc.

3 Comments
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contributions paid in Japan added to the record of the national pension in your home country if that country

This is where the pension system becomes a rip off. The Japanese pension system is more like a long term bank deposit for which you receive small payments from your total investment after retirement. Other countries do not have this system, but Japan refuses to let foreign people receive their funds directly. The funds are only credited to the country’s pension system. In other words, any money you pay into the pension system just disappears and you will never see it again.

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Agreed, the now mid generation will have a hard time getting their just reward. Whilst other countries have actively encouraged self managed retirement funds to address elephant in the room. Jpn despite FSA warnings, full throttle downhill.

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The funds are only credited to the country’s pension system. In other words, any money you pay into the pension system just disappears and you will never see it again.

Not true. I worked in Japan for 11 years, have now reached retirement age, and the Japanese National Pension System pays 66,000 yen into my bank account each month. The procedures were smooth and relatively easy. My wife, who also gets a Japanese pension, received an increase in her pension when I qualified.

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