How-tos | LIFELINES

Don't leave it too late to get your lump-sum pension payment

Reader A.H. writes: “I studied in Nagoya and worked for a corporation there for a year after completing my studies in 1991. I then left Japan on a work assignment in Malaysia with the local subsidiary of the same Japanese corporation.

“Therefore, I’ve been informed by my HR representative that I can only withdraw my EPI [employees’ pension insurance] when I reach the age of 50. Referring to the attached documents, I believe that I’ve contributed to the employees’ pension insurance system (kōsei nenkin hoken).

“I’d appreciate it if you could help or direct me to an appropriate organization that I can liaise with further about this matter.”

Foreign nationals who have short coverage periods under the employees’ pension insurance system can claim a “lump-sum withdrawal payment” when they leave Japan. However, please note that you can only apply for this payment within two years of canceling your certificate of residence (jūminhyō).

You need to satisfy the following conditions: 1) You are not a Japanese citizen; 2) you have been covered by the EPI for more than six months; 3) your domicile is not in Japan; and 4) you have never obtained any Japanese public pension payout in the past, including disability allowance.

You can find the English application form here: www.nenkin.go.jp/n/open_imgs/service/0000005247.pdf.

The amount you can receive depends on the period you were covered by the EPI system. Since this lump-sum withdrawal payment system is for foreign nationals who stay in Japan for the short term, the payment amount hits a ceiling at 36 months, meaning it doesn’t increase beyond that point even if you were covered by the EPI for more than three years.

Please also be advised that by receiving this payment, you are effectively wiping the slate clean. By this, I mean that you will be entitled to zero under the Japanese pension system and cannot use your time spent paying into the system in conjunction with pensions in other countries under any international Social Security agreement your country has signed with Japan. In other words, your term paying the Japan pension cannot be totalized with the period you have paid into the Social Security system in another signatory country, such as Germany, the U.S., France, Canada, Australia, Ireland and so on. You can find the details here: www.nenkin.go.jp/n/www/english/detail.jsp?id=46.

Lastly — and crucially — you are basically required to have been paying into the national pension or EPI for at least 25 years in order to qualify for payments under the “old-age basic pension” program after you reach the age of 65. However, this term will be reduced to 10 years when the consumption tax rate is raised to 10 percent, which is planned for April 2017. (Of course, if you pay in for only 10 years, the payments you receive will be substantially smaller than if you pay in for 25 years.)

Also, under the current law, you can pay for up to the final 10 years of premiums up front. So, if you have paid into the system for 15 years or longer and can afford to fork out for the premiums that would bring you up to the 25-year mark, you would then be entitled to start receiving the basic pension at 65. This reform will make it easier for foreign nationals to be able to draw on the pension when they get older even if they haven’t paid in for the entire 25-year period.

In your case, A.H., it is not clear which system the HR representative was talking about when they mentioned the age of 50 to you. If you left Japan in 1992 — 23 years ago — I’m afraid you are too late to apply for the lump-sum withdrawal payment.

For more information, check out the Japan Pension Service website at www.nenkin.go.jp/n/www/english/index.jsp. There you will find a list of local offices around the country, phone numbers and a lot of useful information in English.

Yuko Yamashita is an attorney with the Foreigners and International Service Section at Tokyo Public Law Office, which handles a wide range of cases involving foreigners in the Tokyo area (www.t-pblo.jp/fiss; 03-6809-6200). FISS lawyers address readers’ queries once a month. Questions: lifelines@japantimes.co.jp

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