Public Pension Insurance System

The outline of the Japanese public pension system

Japan has a public pension insurance system and Japanese residents are required to join the system when they become 20years old.
The system has 2 major plans and most of the eligible people join either of the plans. The National Pension Insurance plan ( 国民年金 ) and the Employees' Pension Insurance plan ( 厚生年金 ) are the plans. The connection of them is rather complicated. The National pension insurance plan is the primary plan and the Employees' pension insurance plan is an extended one for regular employees of the companies and so on. The insureds of the Employees' pension insurance plan don't join the National pension insurance plan, but they are treated as if they join the latter plan via the former plan in relation to the qualification and calculation of the pension benefits.

The Insurance Benefits of these plans are payments of pensions, of course. People, who contribute the premiums for at least 10 years, shall receive pension benefits since they meet the prescribed criteria. The most common one is to reach the age of 65. The amount of the pension benefits varies according to how much and how long the relevant insured contributes until he/she gets qualified.

However, many people, particularly under 40', assume the pension benefits shall not be proportionate to the premiums burden, because the Japanese public pension insurance system appears almost financially ruined. Therefore, the premiums imposed by this system is sometimes regarded as a kind of taxes without any promise of a return. I agree to the opinion to some extent. But I would like to note that the contribution to the public insurance system shall be a better investment than most of private financial products.

[In Japanese]



Classification of the Insureds

All Japanese adults are supposed to join a public pension insurance plan. This rule is applied to foreign nationals living in Japan, too.

The eligible people are classified into the following 3 categories of the insureds in the Japanese public pension system:

[In Japanese]

Exemption by the international agreements

Japan concludes the Social Security Agreements with many countries, in order to keep their nationals from the futile redundant enrollment into the public pension systems of plural countries. The countries include USA, China, Korea and etc. People of companies of these countries, dispatched to an office in Japan for a period shorter than 5 years, are the common cases as the eligible people of the exceptional treatment. They are exempt from the enrollment into the Japanese public pension insurance system. In such cases, the eligible people are supposed to get an appropriate certificate from the relevant bureau of the home country and present the certificate to the Japanese pension office.

[In Japanese]
日本は多くの国と社会保障協定を締結し、互いにその国民が複数の社会保障制度に組み込まれることによる無駄を排除することとしています。この相手国には、米国や中国、韓国が含まれます。これらの国々の会社に勤めている人が5年を超えない期間について日本の事業所に配属された場合が、その典型的な適用対象者です。 この制度の適用対象となってい人は、日本の公的年金制度に加入することを免除されます。この場合、本国の管轄官庁から証明書の発行を受け、日本の年金事務所に提示します。

Handling when an insureds leave Japan

The insureds are required to contribute the premiums for more than 10 years to be qualified as the pension beneficiaries. But many foreigners shall leave Japan and withdraw from the Japanese public pension system before they get qualified. Do the contributions in such cases go in vain? No. An insured who is not a Japanese national, can claim the lump-sum withdrawal refund when he/she leaves the system, provided he/she has paid the premiums for 6 months or longer.

Besides, if the insured are from the countries which conclude appropriate agreements with Japan, he/she may have an alternative way to keep his/her contribution valuable. The countries implement a rule which makes the enrollment period in the Japanese public pension system added to the enrollment period in the corresponding system in the home country. For example, Germany, UK, Korea, USA, France, Australia and etc. have such rules. If you leave for these countries, maybe it is more advantageous than to claim the Lump Sum Withdrawal payment.

[In Japanese]
もし、年金の受給権を得るためには10年間の保険料納付期間があることが必要ですが、多くの外国人はその前に日本から出国することになります。この場合、年金保険料の納付は無駄になってしまうのでしょうか? そうではありません。