Toyota Motor Corp. is looking at drawing up a retirement package for retirees aged 60 to 64 to help them with living expenses until they can tap their public pension benefits, company sources said.
The move is aimed at filling the void that will be created by the government's plan to raise the age when benefits can be tapped to 65 from 60 next April.
Toyota's action comes amid growing calls to address employees' concerns about the situation. The employer of an estimated 69,000 people in Japan, the top automaker's moves are expected to prod others in the sector to take similar action to address the oversight.
Under Toyota's plan, employees who are 18 when they enter the company will set aside about ¥8,300 per month over a 42-year period. Toyota aims to give its staff about ¥210,000 per month during their early retirement years, which is similar in scale to public pension benefits, the sources said.
Toyota is also considering diverting part of its welfare benefits, as well as wages and allowances, to fund the new system. The new system would get off the ground in fiscal 2013 at the earliest, they said.
Since living expenses for an average couple are estimated at about ¥280,000 per month, the deficit is to be covered by an in-house savings program.
The new retirement pay scheme covers all employees, not only those who wish to join it. But for those who are 40 when the scheme starts, the total will only be about ¥2 million, compared with an estimated ¥4.2 million for their younger colleagues, increasing the need to tap into their savings.