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)