Retirement Allowances (taishokukin 退職金)

[hbd]

With standard arrangements in Japanese employment, one is not entitled to a defined amount of retirement allowance. It seems the employer will give you what they can afford and deem suitable IF you work up until the mandatory retirement age. In extreme cases retiring even 1 year early can HALVE your allowance. What's more, if you have circumstances at home that force your hand (e.g.. a spouse or a family member in ill health) and feel you simply cannot work the last few years or 12 months, then the employer will almost certainly deem your 'request' to retire to be for your own reasons/自己都合 (as if you had control over the health and needs of people in you household!), and then in light of that make a decision as to how much you 'deserve'. The terms for management's calculation of retirement allowances and for making such decisions about entitlements are not transparent in a majority of companies nor even in universities.

Would anyone like to share what they have found out about these merry matters in their places of employment?

[Moneymatters]

Experience of a few gaishikei and knowledge of some more through acquaintances.

Taishokukin, where it is offered, is clearly defined in the employee handbook. In most cases it’s one month of final salary per year of service then typically has multipliers that trigger after 10, 15 and 20 years service.
My current firm taps out at 1.3 times from 20 years. By which point I’ll be on my hands and knees, bloodied and battered, crawling toward the ropes whilst my family’s spending habits drag me back to the centre of the ring. But I digress.
I’ve never heard of it not being paid or a reduced amount offered. As a director in my current firm, I’m able to see how these committed costs are accounted for on our balance sheet.

From reading Online, it appears Some larger domestic firms with massive commitments actually move the money into what are effectively trusts.

I know people working for both large and small gaishikei where taishokukin is not offered and they get nothing when they leave voluntarily.

[hbd]

Thankyou very much Moneymatters. I just wrote a long response which my computer promptly swallowed and will not regurgitate, so for now let me say that I should have made it clear I was referring to public sector employment in this country. Here is one statement of the way the bureaucracy can easily deprive an employee of the equivalent of tens of thousands of dollars in retirement allowance. (I'd only add that in my own experience those "regulations" are rarely made available or easily accessible to employees - if anything the opposite is true):

"Because a retirement allowance has a nature of rewards for seniority, for calculating the amount, regulations stipulate the reduction or confiscation of a retirement allowance based on the reason for retirement: a voluntary retirement, a retirement due to a company’s circumstance, or a retirement due to a reason unfavorable to a employer (e.g. disciplinary dismissal)."

Source: https://www.jil.go.jp/english/archives/ ... rm_jp7.pdf

PS: Ben, I sense this thread will develop so I really ought to have started it as a new one rather than one embedded in the Pensions thread. Would you please move it out so as to become a new Forum thread?

[Moneymatters]

Oops! No knowledge of public sector.

That’s an interesting and useful link. Thanks!

This section: “ In principle, a retirement allowance is not a legally enforced system but represents an issue agreed between employer and workers under a labor agreement. However, if the payment and payment standards of the retirement allowance are stipulated by work rules, it is deemed as a wage and the employer has an obligation to make payments.”

Looks to say if it’s written down then the obligation is clear. Could explain why some institutions don’t like to have clear documentation.

[RetireJapan]

I was referring to public sector employment in this country.

My national university has a very clear table laying out the retirement bonus (different categories for finished contract/left early of own accord/injury or death on the job).

It is expressed as a multiplier of base salary.

So when I leave at the end of March (due to my contract finishing), I should get just over 13 months' base salary based on my 13 years employment. A colleague left early last year and go much less (around 60%) due to shifting to the 'left early of own accord' column.

(thread seems fine in the pensions forum -not sure where it would fit better)

[zeroshiki]

My company removed taishokukin and moved everyone to DCs in 2017. I think this is more and more the direction that companies are moving towards.

[RetireJapan]

My company removed taishokukin and moved everyone to DCs in 2017. I think this is more and more the direction that companies are moving towards.

It's much safer for the companies: removes all uncertainty about future payments.

[hbd]

"A colleague left early last year and got much less (around 60%) due to shifting to the 'left early of own accord' column."

Do you now whether it would have mattered at all if your colleague had had to leave early because of falling ill (not through injury 'on the job')? In other words, is it a 40% cut no matter what the circumstances of getting out early? And how many years early did s/he leave? (I fear the answer will be 1 year!)

"(thread seems fine in the pensions forum -not sure where it would fit better)"

I simply thought many would assume PENSIONS means 年金-related discussions rather than ones about 退職金, so might not find the info they're looking for.

[RetireJapan]

"A colleague left early last year and got much less (around 60%) due to shifting to the 'left early of own accord' column."

Do you now whether it would have mattered at all if your colleague had had to leave early because of falling ill (not through injury 'on the job')? In other words, is it a 40% cut no matter what the circumstances of getting out early? And how many years early did s/he leave? (I fear the answer will be 1 year!)

Not sure about falling ill -retirement due to ill health?

But the timing makes no difference at all: either you finish your contract/reach retirement age/take early retirement offered by the uni or you leave on your own (自己都合). I have another colleague leaving this month instead of at the end of March and he will also only get 60% rather than the full amount if he had waited another eight months.

[RetireJapan]

All of this is very clearly set out in the employee rules -although it did take me quite a long time to find the correct page on the website