|

Pensions will pay, but only after 25 years

by Ryoko Minagawa

Special To The Japan Times

One reader wrote to Lifelines with a question regarding pensions:

I’m a part-time English university instructor, now working at two Tokyo universities. In nine years, I will be 70 and, as it stands today, should anticipate being forced to retire.

I will still have to survive, so I anticipate needing to find work at lesser universities without age restrictions, as other instructors have done before me.

However, as I am not a full-time employee, I was told that I cannot have a pension fund — and that I was also too old to start one.

I worked for a Japanese company for two years in 1990-1992. Does anything come from that?

I also worked as a contractor for several companies and agencies from 1998-2000 (or so). Do I have any pension rights there?

I have been working part-time as an English instructor since 2005, and at universities since 2008.

Is there any way to claim some sort of pension when I reach 70? I have heard rumors that there are, but remain clueless.

Anyone who lives in Japan, including foreign residents, is, in principle, required to join either the National Pension System (kokumin nenkin), Employee Pension Insurance system (kōsei nenkin hoken) or the Pension System for Government Employees (kyōsai nenkin). If an individual works for a company on a full-time basis, they should be paying into Employee Pension Insurance. That system supersedes the national one.

If you are a part-time worker, you are covered by the National Pension System. However, some part-timers whose work is nearly equal to the amount done by full-timers might be covered by Employee Pension Insurance. This would depend on the company you work for.

The National Pension premium is currently ¥15,040 per month (this is for the year Heisei 25 [2013]). The Employee Pension Insurance premium depends on the individual’s earnings. To be eligible to receive the pension, individuals have to have paid this premium for at least 25 years. Then, when that individual turns 65, the Basic Old-Age Pension is supposed to be paid.

The 25-year requirement is one that some non-Japanese residents might find difficult to meet.

If a person has paid into a system for less than 25 years, that individual might be able to take into account any period of work in their home country where they paid into a pension fund. Japan has bilateral agreements that involve pensions with some countries. Japan has these kinds of agreements with the following countries: Germany, the United States, Belgium, France, Canada, Australia, the Netherlands, the Czech Republic, Spain, Ireland, Brazil and Switzerland.

For those who can’t take advantage of that kind of agreement, there is another measure that might help them meet the 25-year requirement. Between April 1, 1964, and Dec. 31, 1981, non-Japanese were not allowed to join the National Pension System. Considering this particular policy, an individual who lived in Japan during that period (and now has Japanese citizenship or permanent residency) can add those months or years to those when they paid premiums when calculating whether they meet the 25-year requirement.

Those who plan to stay in Japan temporarily may not see any point in joining the pension system. If that is the case, those individuals may want to look at the Lump-Sum Withdrawal. Non-Japanese who meet the following requirements can receive a reimbursement of their pension payments:

• You must have paid the National Pension premium for six months or more.

You must have left Japan to be eligible to receive the payment.

You must apply within two years of leaving Japan.

The amount an individual is entitled to depends on how long — and how much — they have paid into the system.

To answer the reader’s inquiry, if you have been paying the premium for 25 years or longer, you are eligible to receive the Old-Age Basic Pension when you turn 65. In counting the number of years, you may be able to add the period during which you paid premiums in your own country. To have previously worked for companies for several years per se means nothing. Whether you paid the premium while working there is crucial.

Please bear in mind that this is a complex subject where a lot depends an individual’s particular circumstances. If you have questions regarding your own situation, be sure to consult with an expert or the Japan Pension Service at www.nenkin.go.jp.

Ryoko Minagawa is an attorney with the Foreigners and International Service Section at Tokyo Public Law Office (www.t-pblo.jp/fiss) Phone: 03-6809-6200. Send questions to lifelines@japantimes.co.jp.

  • Yosemite_Steve

    I was fairly sure that the law was to be changed so that the minimum period would be reduced to 10 years (to align with certain international standard). Has that discussion been abandoned?

  • Steve van Dresser

    There is another way to reach the 25 year requirement. Any amount of time that a person has been outside of Japan in their adulthood (since age 20) can be used as “karakikan” or empty time. Karakikan can be added to time actually spent on a Japanese pension plan for meeting the required 25 year participation.

    In my case, I came to Japan when I was 45 years old. Thus I had already achieved 25 years of karakikan before I even started working here. I worked full time at a college for 5 years and I contributed to the National Pension Plan, Kokumin Nenkin for about three years. With my 25 years of Karakikan, I easily qualified to receive pension benefits, but because of my limited contributions, the amount I receive is rather small.

  • JS

    The article does not mention this, but one has to contribute to Kokumin Nenkin for forty years to qualify for full benefits. There are also certain situations, where one can make missed payments retroactively.