Japanese pension system

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The National Pension is a public pension system participated by all persons aged 20 to 59 years.

There are two main systems and at any point in time an individual will be in either system.

  1. Base Pension System. Typically referred to as Kokumin Nenkin 国民年金 (The official name is 老齢基礎年金)
  2. Employee’s Pension Insurance System. Kousei Nenkin 厚生年金. This supplements rather than replaces the Base Pension system.

A minimum period of 10 years, of contributing or exempted periods, is required to receive either Kokumin or Kousei Nenkin pensions.

Kokumin Nenkin 老齢基礎年金 Base Pension System

All registered residents of Japan aged 20 to 59 years must be covered by the National Pension system.

A fixed monthly contribution, subject to change, is to be paid by the individual. (¥16,610 as of 2021).

480 months (40 years × 12 months) of contributions are required to receive the full Base State Pension of ¥780,900 per annum (as of 2021).

There are possible exemptions to contributions for those on very low salary. An exemption, if awarded, will be granted in 25% increments up to 100%. Exemptions need to be requested via the Pension Office who will asses each application on its own merits.

For those in full time education a 100% exemption will be granted but needs to be requested.

For example. A fulltime student aged 20+ may request to have their years of study count towards contributing years without making contributions. This will not affect the amount of pension they receive only the number of years in the system. It also prevents the Pension Office from pursuing unpaid contributions.

(The "See Also" section has a link to find your nearest Pension Office).

Kousei Nenkin 厚生年金 Employee’s pension

Kousei Nenkin is actually part of the 厚生年金保険 (Employee’s Pension Insurance) which covers employee pension payments in the event of death, disability or retirement.

Kousei Nenkin is in addition to the Kokumin Nenkin therefore contributions also contain the required contribution to the Kokumin Nenkin. Deductions on salary statements will not show how much went to each.

Employee income for calculating contributions is currently capped at ¥650,000 per month salary and up to two annual bonus payments of ¥1,500,000 each.

Any Salary or bonus payments in excess of those amounts will not form part of the calculation for Kousei Nenkin contributions.

Contributions into Kousei Nenkin are borne equally between the employee and the employer.

The calculation is 18.3% of in scope remuneration. Standard employees will see a deduction of 9.15% from salary. Monthly salary up to the ¥650,000 limit is split into 32 bands as detailed in the below table.

As an example, an employee earning ¥300,000 per month would be in Band 19. The total contribution would be ¥54,900 and the employee would see a deduction of ¥27,450 each month.

Kousei contribution table for regular employees
Kousei contribution table for regular employees

The latest tables can be navigated to on the Japan Pension Service🇯🇵 Website.

FAQ

Q1 Do I have to pay Kokumin Nenkin?

If living in Japan aged between 20-59 then yes. You may also speak to the Pension office to discussion exemptions..

Q2 I've not been paying Kokumin Nenkin. How far back can/should I pay?

Two years is the limit for back payments.

Q3 How do I find my nearest pension office?

See the link below.

See Also