Pension questions - leaving after 9 years

christiananna

New member
I'm about to leave after working here for 9 years and paying kousei nenkin the whole time.

Am I correct in my understanding that I have to claim the lump-sum payment because, having been enrolled less than 10 years/120 months, I cannot get a monthly pension?

That seems like a really bad situation to be in, because the lump-sum payment caps out at 5 years/60 months of contributions, so I'm losing out on 4 years of contributions.

I've already narrowly missed out on PR (have to leave now for family reasons) and I feel like I'm getting completely f*cked.

UPDATE : thank you everyone for your answers. The consensus is that best thing to do in this situation is to use Japan's social security agreements with other countries to make the whole 9 years "count". But if your country doesn't have an agreement with Japan, you're SOL. https://www.nenkin.go.jp/international/agreement/status.html

The whole thing is still very unfair as benefitting from your contributions should not be a lottery based on departure timing and home country imo
 
@christiananna I wouldn't take the lump sum after 9 years of payments unless you're 100% sure you'll never come back and work for one more year in Japan. As things stand, one more year gets you pension entitlement.
 
@staaar
one more year gets you pension entitlement.

Yep. And it doesn't have to be one more year in Japan, either. One more year in any of the countries with which Japan has a social security agreement with would be sufficient for OP to claim a Japanese pension.
 
@kg1963
What is the Japanese pension after 10 years of contributions?

Depending on your income while you were contributing, it would be between 200,000 yen and 900,000 yen per year. If you only worked in Japan for 10 years during your life, though, you would presumably have pensions from other countries as well.

If I’m reading this website correctly: It’s about 200,000 yen PER YEAR

That would be the bare minimum, applicable to people who weren't enrolled in the employees' pension. The majority of pension recipients would receive more.

it would be better to go on welfare

If you plan to have zero assets/savings when you retire, then this makes some sense. But if you plan to have any kind of retirement savings/investments, you won't qualify for welfare, in which case it would be sensible to have a state-backed pension as some part of your retirement portfolio.
 
@kristhuy True. Although it's a nightmare enough just trying to sort out domestic voluntary payments in my country of origin (UK), let alone Japanese contributions. Can only imagine that few people will manage or bother...
 
@christiananna I am not a pension expert, but for countries that have a treaty regarding this I'm pretty sure that you can use your US social security contributions (etc.) to establish eligibility for Japanese pension payments. Your payments would be 9/40th of someone who worked for the full 40 years in Japan.

(I am pretty sure this is how it works because I am in the reverse situation, and will receive payments from another country that I would not normally be eligible for, thanks to my Japanese credits and the relevant treaty. I'd be very surprised if your situation wasn't treated the same way, because it is the exact reverse of my situation.)
 
@christianhopeforall Most pension treaties don’t credit pension contributions amounts made in one country to the other, just the contribution duration. So, unless op will be short by 9 years to be eligible to receive pension in his/her own country or not planning to return and live in Japan, there is no reason to not take lump sum.
 
@leehop71 Could they use their other country credits to apply for Japanese pension later? IE, I worked 1 year in this other country.. let me have my 10 year Japanese pension?
 
@marie0628
I worked 1 year in this other country.. let me have my 10 year Japanese pension?

Yes, that's basically how it works. If you have 9 years of contributions in Japan, all you need is 1 year of residence/contributions in one of the 18 or so agreement countries to overcome Japan's 10-year threshold and receive a Japanese pension when you turn 65, regardless of where you are living at the time.

But the pension you receive from Japan won't be the "10 year" pension. It will be the "9 year" pension (i.e., 9/40ths of the maximum benefit), because you only made 9 years of contributions to Japan.
 
@leehop71 If they are agreement countries, this is possible, regardless of where you are living. But the pension you receive from each country will be pro rated based on the number of years of contributions you made to each country.
 
@christianhopeforall
Does your home country have a pension treaty with Japan? You maybe able to utilize these payments to your home country’s pension/social security scheme instead of taking it out in cash and getting a fraction of your contributions.

Thank you, that seems to be the answer.

My country of nationality does have that agreement but I've never worked there and I'm about to move to Taiwan, which doesn't... However I worked for 2 years previously in a country with an agreement, so maybe I can use that to get a pension for those 2 years + 9 years in Japan. That small pension in the future is probably worth more than the paltry 495,000 yen at a shit exchange rate that I could get now.

The whole thing feels very unfair still, benefitting from your contributions should not be a lottery based on departure timing and home country.
 
@christiananna Well, here’s a perspective of someone cresting that age where I’ve worked more years than will be working.

495,000 if pulled out now will be spent and forgotten in weeks. But a stable pension income will be an absolute lifeline when there is no surety of work available in the future. Unless you’re hurting for the money now, (which it doesn’t seem to be the case as you’ve got a job lined up already) I think you’re doing the right thing to put this in your back pocket for the prorated pension payout.
 
@christiananna
I worked for 2 years previously in a country with an agreement

FWIW, if you have already accrued at least one year of contributions from an agreement country, you aren't eligible for a lump-sum withdrawal. People who are already eligible for a Japanese pension when they turn 65 (which you are, due to your contributions to an agreement country) are not eligible. See the section titled "Totalization of coverage periods" on page 4 of this PDF from the Pension Service.
 
@kristhuy Good to know ! Although I know several people who were definitely not eligible under those terms who left with the lump sum (which they could do because Japan didn't know that they had worked in an agreement country before)
 
@christiananna The feeling of being F'd is appropriate.

What you need to look at is this:

A) Taking the lump sum of 5 years contributions (the last 5 years specificly) and just YOLO.

vs

B) Seeing if your country has a tax agreement like AFXQ1 linked.

However within B there are two things to consider:

B1) You are young enough that working in your home country, these contribution credits won't have any major impact on you... IE you're just turning 30 and still have 30 more years of work. Most countries use a 25 year contribution measure for full payout, and it will be based on your last 25 years, not most productive years. So take the cash as it doesn't make much of a difference (if you will never come back and work one last year)

vs

B2) You're not that young anymore, and you need these contribution points to achieve max payout in your home country once you get on your feet and working. So convert to contribution credits.

or

C) Plan to come back for one more year of work and claim your Japanese pension as separate from your home country pension. It won't be alot of money, but it will be there as Japan has one of the best funded pension systems in the world even with the upcoming societal collapse :p

Anyone can correct me on this next point if I'm wrong, but I've never heard of a pension system that will convert asset value. When I looked at Canada it was just time credits. When my friend looked at the UK it was time credits.
 

Similar threads

Back
Top