Fuka nenkin

Fuka nenkin (付加年金) is a small top-up to the state pension available to individuals enrolled in Kokumin Nenkin. Contributions are ¥400 per month, and benefits are ¥200 per month (per month of contributions). This equates to annual contributions of ¥4,800, and each year of contributions will increase the state pension by ¥2,400.

Although the contributions and benefits are small, the raw annuity rate is 50%, which is extremely high. For comparison, the annuity rate of kokumin nenkin is roughly 10% (contributions are approximately ¥200,000 per year and benefits are approximately ¥20,000 per year).

Notes:

• Kokumin nenkin subscribers can apply to make fuka nenkin contributions at their local pension office.
• Contributions are tax deductible, and small discounts are available if paying multiple months of contributions in one go.
• Subscribers cannot contribute simultaneously to fuka nenkin and kokumin nenkin kikin (国民年金基金).
• Contributions will reduce the iDeCo allowance by a small amount (for many fuka nenkin subscribers, this will effectively mean monthly iDeCo contributions will be capped at ¥67,000 per month).
• Fuka nenkin benefits are subject to the early/delayed Kokumin Nenkin payment amounts. At age 65, the benefit will be ¥200 per month of contributions; at age 60 it will be ¥140 (70%, rising to 76% from April 2022); at age 70 it will be ¥284 (142%).
• Fuka nenkin contributions are not included in calculations for a lump sum withdrawal (i.e. the fuka nenkin contributions cannot be recovered in part or in full via the lump sum withdrawal system)

Credits

Many thanks to the following RetireWiki.jp users for writing this article:

Kuma, TBS.