Retiring late: More Japanese opt to prolong employment

Retiring late: More Japanese opt to prolong employment

Opt? More like no choice for far too many! Businesses too get a HUGE discount by keeping many of these employees after they turn 60, as at 60 they "retire" and then are "rehired" as a contracted employee with a cut in pay, no bonuses and limited benefits, BUT they do the same job!

If the government wants to make a difference here they should official raise the "retirement" age to 65, but give the option of early retirement to those who want to and are able to retire sooner!

Those 5 years are huge,

Until employers end the practice of firing their workers en mass at age 60, the govt should do absolutely nothing to alleviate their supposed "labor shortage."

He's fortunate to be in such a company and position that they want to keep him.

Far cry to other countries where rampant age discrimination would have someone his age or even younger voluntold to 'retire'

Retiring late: More Japanese have no choice but to prolong employment

Fixed the headline.

"I have no choice but to work," said Furuse, 62, a senior adviser at Orix's corporate business headquarters.

Sad. But not unique to Japan.

This is all about the failure of the pension scam. People have been paying into this scam for 40 years or more and receive virtually nothing back. The whole system is a poorly administered and mismanaged farce. This is why they are trying to scalp funds from every foreigner in Japan. Even the new trainees coming from other Asian countries are made to pay into this scam, which is money they will never see again. As a foreigner, if you pay ¥500,000 into this scam you will only receive ¥90,000 rebate after living outside Japan for one year. The application process is extremely difficult and can only be done from within Japan without any assistance in any foreign language. As a result, most foreigners never apply for the rebate and the money is kept by the pension ministry. It is a blatant rip-off! I’ve been dodging this scam for nearly two decades although, I have been in a few situations where I have had to pay it. For the amount of money paid into this scam it is much better if you were to put the funds into a fixed term deposit. At least you would receive dividends on your deposit and not get ripped-off by a scam.

At 62, Mr.Furuse is not getting a full pension. He will be entitled to the basic old age pension when he turns 65 in addition to the Kosei-nenkin he is receiving now.

The average employee pension in Japan is about 150,000 yen ($1,350.01) a month, lower than government's target of 60 percent of the pre-retirement income for salaried workers, which would be 220,000 yen on average.

Outside Japan you have non-mandatory pension scheme that you could choose from. In Japan you only one scheme, if you want more you need to manage your left over money after you pay that mandatory pension.

Simple calculation you should get more than the money that you put in the first place for your pension, unfortunately that's not the case, you only less money than you put.

Who set the age at 60 to begin with and why ? Also people should be paid what they are worth, so they should look at each case individually.

"I have no choice but to work," said Furuse, 62, a senior adviser ...

If the senior advisors of Japan Inc. “aren’t entirely happy with their pension incomes,” aren’t the rest of us screwed?

Lose-lose situation.

Forced to a kind of slavery (paid at half price the effort)

No younger talent to be monitored since they don't hire before the definitive bye bye time.

Pension scheme is a scam. Just do maths. And getting each year worse. Same in many othef countries. So take care of yourself.

Compulsory retirement age to be illegal one day lol.

Abes govt should just scrap the pension. It is human rights abuse to force peoples to pay money and promise to give it back at age 60. Then change the age to 65, 70. 75...it is like when that take death row prisoners out of their cells and march them for execution, blindfold them, then tell them it’s a joke and march them back to their cells.

As a foreigner, if you pay ¥500,000 into this scam you will only receive ¥90,000 rebate after living outside Japan for one year. The application process is extremely difficult and can only be done from within Japan without any assistance in any foreign language. As a result, most foreigners never apply for the rebate and the money is kept by the pension ministry. It is a blatant rip-off!

Just a word of caution to anyone who reads this. Most countries require a certain number of years of work before you can claim a full state pension, usually 25-30 years. If you've worked in Japan and paid your pension contributions, this time can count towards the 25-30 years even in your home country (depending which country you're from). BUT if you cash out in the way described above, you will not be credited for these years in Japan. So think very carefully about your situation before applying for the rebate, because it's not free money. Don't do something today which you might regret 30 years from now.

M3M3M3 -

As a foreigner, if you pay ¥500,000 into this scam you will only receive ¥90,000 rebate after living outside Japan for one year. The application process is extremely difficult and can only be done from within Japan without any assistance in any foreign language. As a result, most foreigners never apply for the rebate and the money is kept by the pension ministry. It is a blatant rip-off!

Just a word of caution to anyone who reads this. Most countries require a certain number of years of work before you can claim a full state pension, usually 25-30 years. If you've worked in Japan and paid your pension contributions, this time can count towards the 25-30 years even in your home country (depending which country you're from). BUT if you cash out in the way described above, you will not be credited for these years in Japan. So think very carefully about your situation before applying for the rebate, because it's not free money. Don't do something today which you might regret 30 years from now.

Which countries are you referring to? Do you have any links to consolidate these claims? I know this is not the case where I come from.

It is a blatant rip-off! I’ve been dodging this scam for nearly two decades although, I have been in a few situations where I have had to pay it.

I'd like to see someone working in the US who could manage to dodge social security payments for the better part of twenty years. If you have indeed been as successful as claimed, that would suggest the Japanese government needs to study the US model for wringing money out of people.

@ Bullfighter

Even some politicians have been found not to be paying.

As always, mandatory but no fine or any kind of punishment !

I need to be sure my wife stops paying this as soon as she will reach the minimum time of funding the scam before being entitled pension in the future.

As always, mandatory but no fine or any kind of punishment !

Which points to what the Japanese government needs to do.

I need to be sure my wife stops paying this as soon as she will reach the minimum time of funding the scam before being entitled pension in the future.

Not obvious to me how it is a scam. I was only in the public pension scheme for two years but I have already received more than I paid in. (Later, I was in a pension scheme for private university employees.)

@Disillusioned

Which countries are you referring to? Do you have any links to consolidate these claims? I know this is not the case where I come from.

First, let me say I'm hardly an expert on state pensions so please consult a professional if you need serious advice.

That said, the obvious country to mention here is Japan. Unless you have 10 years of contributions, you're not entitled to get any state pension even if you've paid something in. This was changed from 25 years just recently. France has a 10 year minimum, Spain is 15 years, Austria is 15 years, and Belgium is 30. So if you worked for 8 years in each of these 5 countries you wouldn't meet the minimum threshold anywhere and wouldn't be entitled to any government pension. But thanks to social security totalisation agreements between these countries, you can combine these periods together (40 years in this case). However, the main point is that if you opt for the refund of your Japanese pension contributions, these working years is Japan disappear. There are also some countries which don't set any minimum time threshold and just calculate your pension entitlement pro-rata based on lifetime contribution. I think the Netherlands and Canada do this. I'm guessing your country might do this?

Since you asked for links, here's just one example for the French state pension. You can scroll down to the part where it says:

To be entitled to receive any form of French pension (a pro-rata or minimum pension) you must have worked for at least 10 years in France, while the maximum pension amount can only be claimed after working in France for 40–43 years (depending on when you were born).

https://www.expatica.com/fr/finance/retirement/french-pension-guide-the-french-pension-system-for-expats-830117/

In Japan, you need at least 10 years minimum and 40 years to get the full amount of the basic state pension:

You can receive the Old-age Basic Pension at the age of 65 if you have been covered under the National Pension and Employees' Pension Insurance systems. To be qualified, your total coverage periods need to be 10 years or more. ...(full benefit amount based on 40 years of fully contributed coverage periods)

https://www.nenkin.go.jp/international/english/nationalpension/nationalpension.html

These are the countries which Japan has social security agreements with that allow you to combine your periods of work:

https://www.nenkin.go.jp/international/english/international/othercontries.html

Please eliminate the 70 year age limit to teachers at universities. Many of us get better as we age. This arbitary age expiration date is arbitrary and incedibly demoralizing. Plus, doesn't PM Abe need our tax yen from working? Hello?

he application process is extremely difficult and can only be done from within Japan without any assistance in any foreign language.

Why is it that people expect to be provided services in langauges other than Japanese, in a Japanese speaking country?

I suppose if I was in an English speaking country, using your logic, I should expect that they will provide Japanese language services for me! Ant it isnt "extremely" difficult, just time consuming!

Yubaru: Well said.

By the way, 10 years of Social Security payments are required in USA

https://www.fool.com/retirement/general/2015/05/03/when-do-you-qualify-for-full-social-security-benef.aspx

As Reckless points out, a decent number of these 60 year olds have benefitted from lifetime employment, i.e., they have had 35 years of unsackable employment regardless of their ability, and will be on far higher pay than younger staff who may only be on a contract or may be simple arbeiters with no benefits and no job security. Forcing companies to keep older staff on on senior level pay regardless of ability will just mean companies squeeze their younger staff more.

Birth rate keeps decreasing. Working population keeps decreasing. Life expectancy keeps increasing. This is a natural result.

Pension funds are in general a Ponzi scam.

It's with little wonder, that people are being forced to work until death.

What are these words 'rebate' and 'refund' bandied about above mean? Also, what is this 'employee pension'? Is that pension from your employer, or is it the kosei nenkin? Please enlighten a non expat on some of these terms. Thanks.

@Disillusioned

@M3M3M3

Most countries require a certain number of years of work before you can claim a full state pension, usually 25-30 years. If you've worked in Japan and paid your pension contributions, this time can count towards the 25-30 years even in your home country (depending which country you're from).

@Disillusioned

Which countries are you referring to? Do you have any links to consolidate these claims? I know this is not the case where I come from.

Norway is one such country where you have to work for a minimum of 40 years in order to receive a full state pension. Many other European countries have similar schemes and criteria as the ones I describe here, especially the Scandinavian countries. The retirement age in Norway is 67 years, but it's possible to retire as early as 52 depending on occupation etc. It's also possible to continue working after the age of 67, but payouts from the pension scheme will be reduced or may stop entirely.

A person may gain accreditation for work done abroad if the person has been a volunteer member of the Norwegian pension scheme while working abroad, meaning that the person have to pay pension contributions to Norway during that time. A person may also receive a minimum state pension if lived in Norway for a minimum of 40 years after reaching the age of 20. If a person has less than 40 years in any of the categories, the pension will be reduced accordingly, but it's possible to claim combinations of eligibility as well.

Rules and criteria for foreigners and immigrants may vary significantly depending on national agreements and the recipient's citizenship at the time of the first payout. It's worth noting that all immigrants in Norway who enter the country as refugees, they're exempt from all criteria and will always receive the maximum state pension, no matter the time spent in Norway or contributions paid.

In terms of payouts from the pension scheme, these can be made to any country in the world. However, if the recipient was born in Norway but lives abroad, the recipient has to pay an additional 15.9% tax penalty in addition to Norwegian income tax.

My Norwegian skills aren't the best, but that's how everything was explained to me. And here are some links for those who would like to compare the rules with Japanese ones and other countries: 

https://www.nav.no/no/Person/Pensjon/Alderspensjon/Relatert+informasjon/garantipensjon--428407

https://www.nav.no/en/Home

https://www.skatteetaten.no/en/person/

Please eliminate the 70 year age limit to teachers at universities.

Private universities can and do set their own retirement age. They can also offer special appointments to people over the retirement age if they want to keep them.

The retirement age at private universities is set by the university management possibly in consultation with the faculty union (if there is one). It is not set by the Japanese government.

That is also true for private sector companies.

Journalists who write on this subject tend to confuse the age at which you can start drawing retirement benefits with employer retirement age. They may be the same but there is no legal requirement that they be the same.

In my experience, many companies force employees to retire when they are 65, and then rehire those employees as temporary workers at a greatly reduced salary with no benefits.

In my experience, many companies force employees to retire when they are 65, and then rehire those employees as temporary workers at a greatly reduced salary with no benefits.

Here in Japan?