The Japanese National Pension is a pension system that all registered residents of Japan, both Japanese and foreign, are required to enroll in. Since January 1, 2010, it has been managed by the Japan Pension Service.
In 1942 the Workers Pension Insurance Act was enacted, and in 1944 the name was changed to Employees' Pension Insurance Act. It was amended substantially in 1954, and in 1961 the National Pension Act created universal pension coverage for residents of Japan.[1]
(This is also described under Social Welfare in Japan)
Once a person has enrolled in the national pension they will receive a pension handbook with a social security number, which serves as proof of identity. If the pension handbook is lost, Category 1 members can apply at the local municipal office for it to be reissued. Category 2 members can ask their employer or the local Japan Pension Service office. Category 3 members must ask through the employer of the Category 2 member on whom they are financially dependent.
The monthly contribution amount for the national pension from April 2019 to March 2020 is ¥16,410. Contribution for each month must be paid by the end of the following month. Contributions can be paid at banks, post offices, or convenience stores, as well as by bank transfer or online.
If members have trouble paying due to low income or other reasons they should apply for exemption from contribution payments at their local municipal office. The pension office will examine their previous year's income and other factors and may give a total or partial exemption from payments.
| Type of exemption | Contribution amount | Amount of old-age basic pension |
|---|---|---|
| Full exemption | ¥0 | 4/8 |
| 1/4 payment (3/4 exemption) | ¥3,780 | 5/8 |
| 1/2 payment (1/2 exemption) | ¥7,550 | 6/8 |
| 3/4 payment (1/4 exemption) | ¥11,330 | 7/8 |
| Contribution postponement for low-income youth | ¥0 | ¥0 |
| Special payment system for students | ¥0 | ¥0 |
Failure to make partial payments after an arrangement has been made will be regarded as non-payment rather than partial exemption. Periods of non-payment may not be included in calculating the old-age basic pension that the member will receive in the future. In addition, non-paying members will not be entitled to the disability basic pension and survivors basic pension in the case of unexpected circumstances.
People in their 20s can use the contribution postponement system for low-income youth.
Students can use the special payment system for students. Generally speaking, students at Japanese schools overseas are not eligible for the special payment system for students.
Payments making up for payments that the member was exempted from in the past can be made for up to 10 years afterwards. If they are brought fully up to date, the members old age basic pension will be calculated in the same manner as for full contribution payments.
Both the disability basic pension and the survivors basic pension have set contribution payment requirements. Such benefits can't be received unless these requirements are met.[4]
Foreign residents who have contributed to the national pension for 6 months or more (not including as category 2 or 3 members) and who have not contributed for 10 years, can claim a lump-sum withdrawal payment within two years of leaving Japan. However, even if a Japanese or foreign resident has not contributed for 10 years, if their country has a reciprocal social security agreement with Japan, some such agreements allow the number of years of contributions in both countries to be totalize in determining eligibility. Even if there is no such reciprocal agreement, they may be able to receive a pension based on (period spent outside Japan after age 20) if they become permanent residents before the age of 65.[5] [6]
The amount of the lump-sum withdrawal depends on the number of months that contributions were paid for:
| Total contribution-paid period | Benefit amount |
|---|---|
| Between 6 and 11 months | ¥45,300 |
| Between 12 and 17 months | ¥90,600 |
| Between 18 and 23 months | ¥135,900 |
| Between 24 and 29 months | ¥181,200 |
| Between 30 and 35 months | ¥226,500 |
| 36 months or more | ¥271,800 |
The total contribution period paid period is calculated as follows:Total number of months paid + (number of months of one-quarter contribution paid × 0.25) + (number of months of half-contribution paid × 0.5) + (number of months of three-quarters contribution paid × 0.75).Application procedures for lump-sum withdrawal paymentsWhen canceling their alien registration, pension members should file a notice of forfeiture of national pension, and get a claim for the lump-sum withdrawal payment. After leaving Japan the claim form should be sent to the Japan Pension Service.
The reason for the lump sum not increasing after 36 months of paying into the pension scheme are unclear, but may relate to the JET Programme, where young foreign graduates come to Japan to teach English in public schools.[7] Until 2006, JET participants could only work in the program for three years and it appears the lump sum rules were crafted with this in mind.
Some countries have concluded bilateral agreements with Japan to eliminate dual coverage in pension systems and allow enrollment periods in foreign pension system to be counted when calculating eligibility and benefits to be paid.[8] [9] [10] Social Security (mandatory health insurance, employment insurance, and pension contribution) payments by employees are typically about ¥40,000 per month.[11]
In fiscal year 2011 the National Pension program recorded a surplus of ¥198 billion. This was the third consecutive year that it had been profitable.[12]