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© KYODOJapan to step up enrollment of foreign residents in pension system
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Chabbawanga
Just call it a tax ffs. If everyone has to pay it, that is essentially what it is. If you are a good enough little foreigner then you get a slice after giving your life to Jcorp. Otherwise its the price of living here.
dagon
It is just a highly regressive tax with little or no benefits for the majority of foreign residents,
Just call it a 'Su[port Japan's Ageing Population Tax'.
I know foreign 'trainres' or students, some you may ,eet at your local conbini, for whom it is a choice between food and the pension bill at the end of the month
Antiquesaving
If they take pension at the ¥16,980 a month then 5 years foreigners are at the limit of what they can get back if they leave.
So if Japan wants to keep taking after 5 years and it not being outright theft, then it should automatically give anyone remaining and paying pension permanent residency regardless of their circonstance!
proxy
What is the rate of return that a 20 year old should expect for their monthly 16,980 yen? Would they be better of putting that money into ETF funds?
Antiquesaving
I fully agree but I do have to point out that if they are students in a legitimate educational institution the school is supposed to issue documents exempting them from paying the pension portion.
I know this because both my children were issued these documents each year during their university once they turned 20!
Newgirlintown
I spoke to someone at the pensions office where I live about this and even they said it wouldn’t be worth enrolling in given the low returns.
sakurasuki
People who just study abroad and choose Japan, even those people are in just shorter term they'll also get letter to join Japan pension system.
sakurasuki
Not only that foreign ETF will give even more, especially with weak yen.
Antiquesaving
Yes they get a letter, but the school will issue a document and they don't have to pay if they are full time students
BigP
Some foreign residents don’t have enough income to pay the pension fees. Then getting your refund is near impossible for a non Japanese speaking , reading , writing foreigner.
JGov must guarantee ALL their payments will be refunded BEFORE they leave the Japan.
2 Year Old
Why not make all the politicians back pay what they owe to the pension fund first?
Chabbawanga
Not going to be anywhere near as tidy as sticking it in the S&P for 45 years. I know that a large portion of their investments goes in to Japanese Government bonds... I'll leave you to decide whether that is a good investment.
Seesaw7
I wonder what is an average amount of pension a foreigner received?
My friend said she receives 74,000¥ per month. She had quite a good job before retirement.
Daninthepan
If you are self-employed like me you only get half the pension you would working for a company. I didn't pay mine for years then they came after me so I had to back pay a few years. Basically I'm paying 34000 a month for about 5 years then pay 16900 for the next twenty. They estimate my pension will be 27000 a month. By my calculation, I have to live until I'm 84 just to break even assuming they don't up the entitlement age.
(This country owes me way more than I owe it).
WoodyLee
This is a complete Rip Off, 16,980 jpy / mth that you will never collect since most foreigners return to their homeland around 60.
Even if you apply to collect you get minimum under $600.00 / mth. and TAXED as an income too.
Falco1
I am perplexed about this move,I noticed that recentely the central government is adding more obbligations to the foreign community and even talking about to pass a law to revoke PR for not paying taxes or health insurance but on the other hand no rights are be given.
It is frankly preoccupying the pattern they are going into,furthermore if some foreigner will work and not live permanently in Japan should not be obliged to enter in such system.
Abe234
I’m16900 yen invested monthly for 40 years at 6% annual return would give you about 32 million yen. If you withdrew 4% as is often recommended as a sustainable withdrawal rate you could take out 1,920,000 per annum and you’d still have the 32,million yen in the fund. That 32,million would still be compounding annually while in retirement too especially if you bought an annuity. Compared to the Japanese pension which would give you a measly 800,000 yen.(approximately).per annum
So even the poor are being financially scammed. Cause the Japanese government could be buying up US bonds, guilts etc at say 4%+. And that’s all before most will never reach the heights of 40 years of full contributions. And told to sod off when you need help.
The best return there is for the Japanese pension is another stupid “voluntary payment” called the fukanenkin. You get your money back after a couple of years with a doubling return on that. Just make it a tax deduction, increase the pension and those with the broadest shoulder contribute more and those who need “help” can have a decent life.
OssanAmerica
This looks like another aspect of Japan (and there are a few for sure) that could use updating and correcting.
In the US, a foreigner with a working visa will be paying into the Social Securty system if they work. And they will be entitled to whateer benefits they are owed at retirement age, regardless of whether they still live in the US or not. The SSA will send benefits to most nations.
Foreign residents in Japan most certainly should be paying into the pension system as required. But they should be entitled to receive their benefits if qualified, even if they no longer live in Japan.
proxy
These government mandated pensions are real boondoggles. The US social security doesn't have a penny in it as it has all be "lent" to the government and taxpayers have to pay it back. The Canadian plan spent $45 billion dollars on salaries for "financial experts" who get a lower return to the plan than if the money had just gone into a scattershot of random stocks.
And The Japanese system seems like a top heavy pyramid scheme.
JeffLee
People who retire in Canada have 20% of their Japanese pension removed as a tax, and it’s an amount that cannot be claimed back at the end of the year assessment. Basically it’s a surcharge, and it’s discriminatory, as many other countries are exempt. Canadians who want to retire in their home countries should be allowed to decline enrolment in the Japanese pension in the spirit of fairness and non-discrimination.
Futaro Gamagori
I don't like it
But I don't want to go back to the UK either
So, i just need to $uck it up
Roger Gusain
I have always paid into the system (unlike a considerable number of my fellow gaijin). It's just the price you pay for living in this wonderful country. It isn't a lot of money if you have a good job.
I don't expect to get much of a pension though -- it will just be beer money for me.
justasking
Well, if you stay here and pay 10 years, you are entitled to receive the pension even after you return to your country. Still, it's only up to around 700k per year. Obviously not enough.
Peter Neil
you’re lucky to get enough for beer money if you hang around long enough to retire.
plan your escape.
Roger Gusain
you’re lucky to get enough for beer money if you hang around long enough to retire.
plan your escape
Too late in my case -- I've put down roots here. Good advice for younger people though.
DanteKH
Japan has by far the lowest pension from ALL developed countries. Basically people cannot retire on this country, they have to work until they die in order to support themselves. That if they don't have any savings aside.
Previous generation could save a lot of money back then, nowadays it is impossible to save in this economy.
kohakuebisu
Any data to back that up? I would have thought most people still here in their late fifties are here for good. Moving back is a lot of disruption at an age when people don't like disruption and have accumulated lots of friends and stuff.
wallace
kohakuebisu
JP pension maxes out at 40 years of contributions, so there is no point in (even Japanese) 20 year old college students paying in. 23 to 63 would still be 40 years. The kicker is of course that any private investment at 20 would have 40 years of compounded returns before retirement age. Any national pension contribution made at 20 years old goes down as one year out of forty with zero compounding. Its ROI will be tiny, even if you hit the pension ROI jackpot and to live to 100.
Jonathan Prin
Full Ponzi scheme if you know maths because demography involved.
Did you think demography had no impact ?
Paying a contribution amount in a system that will give you less than what you invested is called embezzlement.
So I note not to come as a PR before 60, thanks.
And that is just the beginning about taxing whoever they can.
robert maes
17000 ? I paid 170.000 yen a month, knowing I would get some ridiculous low pension on retirement. It is theft.
I could recover 80 % of my payments of the last 4 years but what about the rest ? A donation to Japan ?
Antiquesaving
Don't blame Japan on that one!
It was Canada that signed the agreement with Japan regarding Old Age Security (OAS) and the Canada Pension Plan (CPP). (Except Quebec because it has its own pension plan).
If as you say
Then blame Canada for making that deal!
Hello Kitty 321
When I came to Japan the would not pay back any money at all if you left the country. On the other hand, participation was not compulsory then
kohakuebisu
The best way to judge a public pension scheme is against what a private pension would cost for an annuity giving the same monthly payout.
A UK annuity paying JP pension (80000 yen a month, 400 GBP, till you die starting at 65, no cash out, no transfer to family) costs about 67,700 pounds (for person with UK life expectancy). That's 13.5 million yen. Divide by 40 years (480 months) and it is 28,200 yen a month). Japanese kokumin nenkin is 18000 a month, so cheaper (you dont "get less back") but only 10000 a month gained on average from compounding.
The return might be low, but getting everyone to pay saves the state having to pay welfare to old people who have zip. Old people on seikatsu hogo are what we want to avoid. It also saves us having beggars on every street corner. A cheap but low returning pension may be a low price to pay for all this. I know JP people may say sensationalist stuff about 18000 a month for kokumin nenkin ("OMG so TAKAI") , but as my example should demonstrate, this sum is chickenfeed in the world of pensions. Someone paying national insurance on an average UK income is paying 2.2 times that, their pension won't start until 67 or higher, and they won't live as long as a JP person.
Tim Sullivan
It also saves us having beggars on every street corner
We may not have to wait too long to see that. How can any pensioner survive on that miserable amount?
ian
Go after the companies who don't enroll their employees
tamanegi
@ian is right. Go after the companies especially the eikaiwas.
aaronagstring
Think I read on here a couple of years ago when a new law came in that some companies got round paying pension and SS etc by splitting into smaller companies. For example, having one company with 500 employees, they split into 5 companies with 100 employees each, and shafted all their workers. Then it got changed again, about 2 years ago, so they were forced to pay contributions.
So I’ve only been paying for two years. When I retire, if I retire, (I’m 52) I’ll get jack. Been here, working for over 20 years. Now you want to make it compulsory? Thanks Japan!
Why go after the little man; get the big-wigs and the companies that don’t contribute a single yen.
ian
Not sure what you meant. Were the companies able to get round paying pensions legally by splitting? Or they just lessened the risk of getting caught
In any case, the govt should enable itself to be able to force those companies to pay back what they owe on your behalf. Problem is half of the payment comes from you so it should be waved somehow in those cases
aaronagstring
Companies with more than 500 workers had to pay contributions. So companies with that number or more split to smaller parts so they didn’t have to pay. (Because they didn’t want to). Then it got changed again to more than 100 workers a couple of years or so ago. This is what my company did.
ian
Ah so legal. That's annoying. Move wasn't well thought and the efforts and long process it must have taken were wasted
OssanAmerica
The exact same situation exists in the United States, the no.1 economy in the world.
And to make it worse the US has a medical cost system that is literally killing retired people. On that front. Japan is miles ahead.
kohakuebisu
You get something if you pay in for ten years. I'm six months off qualifying but will probably end up paying twenty years in total. If the ROI were better, I would try to backpay some missing years, or missing years for my missus, but it isn't, so I won't.
Makoto Shimizu
There is an agreement between Japan and Brazil regarding the retirement, so both countries recognize the working time reciprocally and if monthly pension is paid in one country it is not necessary to pay in another, it counts in both countries and pension will be calculated proportionally. 65 years old is the age of retirement for men in both countries. Nobody likes to have to pay monthly tax, but this is like a saving account, better than nothing, for young people it may be worth claiming for the last 5 years payments to start their own business.
Abe234
DanteKHToday 12:04 pm JST
Totally! Hence the massive to drive to create a NISA. Which will become compulsory in the future. I’ll give it 10 years!
Jonathan PrinToday 12:59 pm JST
Oh totally. Now the demographic “pyramid” has flipped. And there are no future children to prop up the pyramid there are only two answers and neither are palatable to the Japanese population. 1) increase taxes or 2) increase immigration. Who will become net tax payers, and workers and consumers. 3)increase sales taxes to European levels. 4) we could force everyone to have kids. But that might have some human rights implications. LoL. Sadly cake and eat it isn’t going to be offered.
Tim Sullivan
The GPIF is the world's largest pension fund with assets of $1.54 TRILLION (December 2023). Why is the government so stingy when they could easily afford to make pensioners' lives a bit more comfortable?
smithinjapan
What's most "amusing" about this is the fact that cities have the right to deny foreign residents the pension they pay into for the better part of their lives. This has been proven by cases wherein defendents (foreign nationals living in Japan as permanent residents) were denied the pension they had paid into for DECADES (some their whole lives) because the city offices and then the courts deemed them not officially "国民" by definition, and therefore not eligible for 国民年金.
Here is but one example:
https://www.scmp.com/news/asia/article/1557063/anger-erupts-over-court-denial-welfare-foreign-permanent-residents-japan
So once again, Japan is finding ways to force you to pay, knowing full well you may well get no return and have no rights to refute that fact.
smithinjapan
They're also currently pushing legislation to take away residency more easily, like for such heinous crimes as forgetting to carry your residence card, or if you make a mistake on taxes (like so many people here, foreign or domestic do!) and they deem it not to have been an accident. So, yeah, you go out and get profiled by the police and stopped for no reason (happened twice this year so far to me!) and forget your card? kiss your pension goodbye as they strip you of your permanent residency and show you the door.
The government has so poorly managed things here for so long that they see the numbers written on the wall and know it is too late to get the money to support the system in even the near future. They are doing everything they can to squeeze it out of all of us.
Tim Sullivan
They're also currently pushing legislation to take away residency more easily, like for such heinous crimes as forgetting to carry your residence card, or if you make a mistake on taxes (like so many people here, foreign or domestic do!) and they deem it not to have been an accident. So, yeah, you go out and get profiled by the police and stopped for no reason (happened twice this year so far to me!) and forget your card? kiss your pension goodbye as they strip you of your permanent residency and show you the door.
The government has so poorly managed things here for so long that they see the numbers written on the wall and know it is too late to get the money to support the system in even the near future. They are doing everything they can to squeeze it out of all of us.
Your fears about gaijin becoming scapegoats for the LPD's criminal incompetence are understandable. But I wouldn't worry too much -- there is strength in numbers! I've been living here for 40 years and some parts of Tokyo don't even look like Japan anymore.
ian
That url says welfare is that the same as pension?
ian
Isn't it the case that all residents has to be part of the pension system all this time?
They're just getting strict now with implementation?
リッチ
Part of living in Japan are national programs. National Health National Pension and National Unemployment. These are strengthens of living in Japan and frankly speaking crybabies stop crying or move. Every program has safety systems in place to assist people who can’t afford it and if your wages or circumstances change they will work with you. In additional national pension is not a retirement fund you can live off of. It’s a safety insurance for basic needs and there are many more programs when you retire to assist if you have PR or are Japanese to live safety.
TokyoCarnivore
i have to ask didn’t the United States government make some deal with Japan in regard to Americans living in Japan who pay into Social Security and Japanese pension can only receive one or the other, but they can’t have both?
Hope thats not true, we are paying into the Japanese pension system for nothing
3RENSHO
posted by 'aaronagstring': "For example, having one company with 500 employees, they split into 5 companies with 100 employees each, and shafted all their workers."
An excellent example! NOVA (conversation school chain) changed their name to G.education and did precisely the same...
ian
You must assume that whatever arrangements made by your govt, they must be to your advantage.
From what I understand when you pay into the japanese system payments can be credited (later) to your pension system in the US.
Namorada
Why not go after the Japanese who aren’t paying in?
Additionally, why aren’t they going after Eikaiwa that are no longer hiring workers but independent contractors so that they can avoid paying their half of the pension/healthcare costs.
As always, the Japanese government is going after those pesky foreigners while turning a blind eye to the businesses owned and operated by Japanese who avoid paying their workers more and look for ways to avoid paying into the national health and pension systems.
TokyoCarnivore
Thanks Ian, I’m still a few years away from retirement but I guess much can change between now and then.
zibala
Time for anyone from a foreign country here who is in their 70s to return to their original country.
wallace
zibala
So you expect me to leave my Japanese partner and family behind. Some people move to Japan just to retire. My life and business is in Japan.
john b
and then try to plan for retirement by investing overseas. if you like sleeping, don't look into how the japanese government handles that.