How-tos | LIFELINES

Employer made me hand over my lump-sum pension payment

by Seiji Yamaura

Special To The Japan Times

A reader wrote in with a question about the lump-sum withdrawal payment that foreign residents who have paid into the pension system can claim after leaving Japan:

I was sent to Japan as an expatriate and worked for 2½ years at a Japanese company. Due to my home country’s agreements with Japan, I was allowed to have the lump-sum withdrawal from the Japanese public pension. But during the period of employment in Japan, I was forced to sign a document with an agreement that stated that I would pay the received lump sum to my Japanese employer.

I was told verbally that they would terminate my contract if I did not sign the agreement. Consequently, I signed to be able to keep my job in Japan and continue my private life plans. When I returned to my home country, I paid the lump sum to my earlier employer since I was afraid of their threat of “disciplinary actions.”

After some time, I looked into labor law and found that many parts of the law are not possible to negotiate away. One of those areas is about the public pension, meaning that even though my employer forced me to sign the document, the signed agreement is not valid. This means that the previous employer should pay back the lump sum to me. I would be thankful if you can give me advice of how to proceed.

There are international social security agreements — often called totalization agreements — between Japan and other countries. One of the aims of these agreements is to avoid dual social security taxation when a foreign national works abroad. Another reason is to bridge gaps in the benefit system for employees who have split their careers between different countries.

Japan has reached bilateral agreements with the following countries: Germany, the United States, Belgium, France, Canada, Australia, Netherlands, the Czech Republic, Spain, Ireland, Brazil, Switzerland and Hungary.

Under these agreements, which vary from country to country, a citizen from the country concerned can choose either to receive a certain monthly premium from their public pension in Japan on top of their home-country pension or receive a lump-sum withdrawal payment from the Japanese government.

It’s important to note, however, that the lump-sum withdrawal payment can be provided to any foreign national who has been paying into the Japanese public pension for more than six months, not just those from the countries named above. The size of the lump-sum payment is determined by the coverage period, but it is capped at 36 months. Of course, once the lump-sum withdrawal payment has been given, that draws a line under the person’s relationship to the Japanese pension system, meaning they won’t receive any further payments after retirement.

There are several conditions to fulfill before you can apply for the lump-sum withdrawal payment. The most important is to file the application within two years of your removal from the residence registry in Japan — basically, within two years of leaving the country. You cannot qualify for the payment if you are still registered as a resident in Japan. Also, those who have received any form of Japanese public pension payment, including the disability allowance, cannot apply. Lastly, as mentioned previously, the applicant has to have paid into either the national pension (kokumin nenkin) or the employees’ pension (kōsei nenkin) for at least six months.

The threat from the reader’s employer of disciplinary measures means that the reader cannot be considered to have signed the agreement under his own free will. Considering this circumstance, the agreement between the reader and his employer could be rescinded on the grounds of duress according to civil law in Japan. It would be best to start negotiating with the employer about the return of the payment as soon as possible.

If the employer refuses to pay back the money to the reader, he could try suing the company from his home country, but there are also some options to take action against the company in Japan.

The best choice would be to sue the company with the help of a lawyer in Japan, but if the reader were able to come back to Japan — an expensive option, unless he was planning to return anyway — he would also be able to have mediation with the employer in court or with the Labor Standards Bureau’s Inspection Division.

Seiji Yamaura is an attorney with the Foreign nationals and International Service Section at Tokyo Public Law Office, which handles a wide range of cases involving foreigners in the Tokyo area (03-5979-2880; www.t-pblo.jp/fiss) FISS lawyers address readers’ queries once a month. Your questions and other comments: lifelines@japantimes.co.jp