Japanese university pension

[TJKansai]

I should get between 2 and 2.5 million a year, but that is after paying in at a pretty substantial rate for 25 years.

I think my wife will get 700,000/year for her 10 years of paid income.

My taishokin will be substantial since I have been at the same uni a long time, between 30-40 months' salary.

I think anyone who works 5 years or more (as a sennin) gets it, but the table really rewards length of service.

[jonnyd]

So if I keep paying my UK pension I should get the full UK state pension, plus my wife's kokumin nenkin and my kosei nenkin. So I am looking at something like 2.5 mil a year?

[Moneymatters]

So if I keep paying my UK pension I should get the full UK state pension, plus my wife's kokumin nenkin and my kosei nenkin. So I am looking at something like 2.5 mil a year?

https://www.psrn.jp/tool/nenkin_sj.php
Just tried 20 years at 7mil pa. That gives 117万　（77万　kousei、40万 kokumin).
Dependant spouse 40万 kokumin.
UK pension at current fx rate is 145万.

So potentially closer to 3mil. but clearly several assumptions there and you'd have tax and other deductions to contend with.

[imaginatorium]

So if I keep paying my UK pension I should get the full UK state pension, plus my wife's kokumin nenkin and my kosei nenkin. So I am looking at something like 2.5 mil a year?

You also have to remember that you will not get the "full" UK pension - you will get the UK pension depreciated by inflation. There is no guarantee that 1 million yen one year is not 500,000 yen ten years later. Or worse. Personally I do not think subscribing to the UK pension is a good idea, unless you have a firm plan to retire to the UK (or whatever political entity it is then).

[RetireJapan]

You also have to remember that you will not get the "full" UK pension - you will get the UK pension depreciated by inflation. There is no guarantee that 1 million yen one year is not 500,000 yen ten years later. Or worse. Personally I do not think subscribing to the UK pension is a good idea, unless you have a firm plan to retire to the UK (or whatever political entity it is then).

I'm also sceptical about pensions, but the UK state pension is currently being increased by more than inflation (the 'triple lock') and the rates to pay in voluntarily are basically nothing (class 2) or around half of kokumin nenkin (class 3) for currently twice the payout.

Seems like a good side bet to me

[Wales4rugbyWC23]

You also have to remember that you will not get the "full" UK pension - you will get the UK pension depreciated by inflation. There is no guarantee that 1 million yen one year is not 500,000 yen ten years later. Or worse. Personally I do not think subscribing to the UK pension is a good idea, unless you have a firm plan to retire to the UK (or whatever political entity it is then).

I'm also sceptical about pensions, but the UK state pension is currently being increased by more than inflation (the 'triple lock') and the rates to pay in voluntarily are basically nothing (class 2) or around half of kokumin nenkin (class 3) for currently twice the payout.

Seems like a good side bet to me

In the lottery of state pensions as an expat, the British state pension you really have already won first prize. Unlike most OECD countries Japan and the UK do not have a totalisation pension agreement with each other. This means you can pay for two state pensions and get two. This provides for a real firm foundation of a secure retirement income. Of course topped up with personal private provision. Americans and Australians have told me how envious they are of our situation. They are both covered by totalisation state pension agreements between their respective countries.

Undoubtedly, there are downsides to receiving a state pension in a foreign country especially related to currency fluctuations and unfortunately there is no no triple lock for Japanese residing British expats. Also someone my age can only get it when I will be 67. I am sure Japan is going to go that way soon, anyway.

Class 3 yearly national insurance contributions are just over 800 pounds. The current monthly state pension is 750 pounds. It is such a winner that every Japanese residing Brit, I meet I tell all them about it. Just off to write my cheque for my 2021 NICs, fortunately HMRC still take cheques.

[Tkydon]

In addition to your standard allowances, your pensions (Japan, Uni & UK) should be eligible for the Public Pension Deduction...
You should consult a professional

https://www.nta.go.jp/taxes/shiraberu/s ... df/050.pdf
Page 10, 22-23

Public pensions - Income of the National Pension, the Employee Pension, defined benefit corporate pensions, defined-contribution pensions, other public pensions and certain foreign pensions, etc.


Assuming Allowances
Basic Allowance - 480,000 National, 430,000 Residents'
Spouse Allowance - 380,000 National, 330,000 Residents'

Without the Public Pension Deduction

2,000,000 - 380,000 - 380,000 = 1,240,000 Taxable Income

1,240,000 * 5.105% = 63,302 National & Reconstruction Taxes
1,290,000 * 10% + 5,000 = 134,000 Residents' Taxes

63,302 + 134,000 = 204,302 Total Taxes

However, if your Pension Income (Japan, Uni & UK) is all eligible for the Public Pension Deduction

https://www.tax.metro.tokyo.lg.jp/book/ ... k2021e.pdf
See the table on Page 8
Different for Under 65 and Over 65

For Under 65
and Pension(s) in the band ¥1,300,000 to ¥4,100,000
And Any other Income is ¥10,000,000 or less
Then, the Public Pension Deduction would be calculated as

Income from Public Pensions × 25% + ¥275,000

So, if your total pension is Y2,000,000, and you have very little other income, then The Public Pension Deduction would be

¥2,000,000 /4 + ¥275,000 = 500,000 +275,000 = 775,000

Add in any other deductions such as Insurance Policies, Medical Expenses over 100,000 per year, etc.,

480,000 + 380,000 + 775,000 (+ Others) = 1,635,000 (+ Others) Total Allowances and Deductions
2,000,000 - 1,635,000 (+ Others) = 365,000 (- Others) Taxable Income
to be taxed at 15.105% (5% National, 0.105% Reconstruction, and 10% + 5000 Residents' Taxes)
365,000 * 5.105% = 18,633 National and Reconstruction Taxes

Residents' Deductions
430,000 + 330,000 + 775,000 (+ Others) = 1,535,000 (+ Others) Total Allowances and Deductions
2,000,000 - 1,535,000 = 465,000
465,000 * 10% + 5,000 = 51,500 Residents' Taxes

18,633 + 51,500 = 70,133 Total Taxes (compared to 204,302 Total Taxes above)


Over 65
and Pension(s) in the band under ¥3,300,000
And Any other Income is ¥10,000,000 or less
Then, the Public Pension Deduction would be

¥1,100,000

So, if your total pension is Y2,000,000, and you have very little other income, then The Public Pension Deduction would be

Add in any other deductions such as Insurance Policies, Medical Expenses over 100,000 per year, etc.,
1,100,000 + 480,000 + 380,000 (+ Others) = 1,960,000 (+ Others) Total Allowances and Deductions
2,000,000 - 1,960,000 (+ Others) = 40,000 (- Others) Taxable Income
to be taxed at 15.105% (5% National, 0.105% Reconstruction, and 10% + 5000 Residents' Taxes)

40,000 * 5.105% = 2,042 National and Reconstruction Taxes

Residents' Deductions
1,100,000 + 430,000 + 330,000 (+ Others) = 1,860,000 (+ Others) Total Allowances and Deductions
2,000,000 - 1,860,000 = 140,000
140,000 * 10% + 5,000 = 19,000 Residents' Taxes

2,042 + 19,000 = 21,042 Total Taxes (compared to 204,302 Total Taxes above)

The Japan Sourced Pension Income should be paid net of Withholding Tax 5.105% (5% National, 0.105% Reconstruction Taxes).
(I'm not sure if they will also withhold the 10% + Y5,000 Residents' Taxes)

(I'm not sure if they will take into account the Public Pension Deduction or withhold tax on the gross amount)
(2,000,000 x 5.105% = 102,100 National and Reconstruction Taxes, if calculated on Gross)
(2,000,000 x 10% = 200,000 Residents' Taxes, if calculated on Gross)
(102,100 + 200,000 = 302,100 Total Taxes, if calculated on Gross)

If your Pensions are eligible for the Public Pension Deduction, then the final tax rate would be
21,042 / 2,000,000 = 1.05%

Other Deductions, that I omitted above would bring that down to Zero. See TBS's post following.

However, with Foreign Sourced Pension Income you must file the Kakutei Shinkoku.

Under the terms of the UK-Japan Tax Treaty,

http://www.mof.go.jp/tax_policy/summary ... n-UKEN.pdf

Article 17
Subject to the provisions of paragraph 2 of Article 18 of this Convention, pensions and other similar remuneration beneficially owned by a resident of a Contracting State shall be taxable only in that Contracting State.

there should be no UK Tax on the UK Pension, so no need to file a Foreign Tax Credit, unless you have other income that incurs foreign taxes.


Health Insurance Premium, National Pension Contributions, etc., will then be calculated based on the Taxable Income from the previous Tax Year.
in the first year after retirement, they will be high, based on your last employment year's income, but from the second year should settle down to the retirement level. See links in TBS's message below.

You should consult a professional.
You should confirm whether your pensions are all eligible for the Public Pension Deduction.
You may have to file a return to claim the additional Allowances and Deductions against Japanese Pension Income (even before your receive UK Pension).
You will have to file a return to claim additional Medical Expenses over Y100,000, and/or Furusato Nozei, or other deductions, including ongoing Japanese National Pension or UK National Pension Contributions (even before your receive UK Pension).
You will have to file a return when you receive your UK Pension Income.

[TBS]

...

Lots of good info here. These are a few points & corrections worth highlighting:

- The basic allowance for income tax (基礎控除) is now ¥480,000 (since 2020).
- Anyone receiving a UK pension will be over 65, so qualify for the higher public pension deduction of ¥1,100,000 in the ¥2M pension income example.
- The basic and spouse deductions used for assessing residents tax are slightly different from those for income tax - ¥430,000 & ¥330,000 respectively.

For people who can read Japanese, I'd recommend using simulators like these for estimating income, residents, and social security (health & nursing insurance) taxes:
https://www.mmea.biz/simulation/kokuho_calculation/
https://www.mmea.biz/simulation/nenkin_simulation/

I ran the numbers for ¥2M example, and for an over 65 the main taxes are the social taxes (社会保険料) at about ¥150,000 per year (following the first year as @Tkydon highlights due to the way they are assessed). The social taxes deduction and higher public pension deduction then mean the pensioner is exempt from income taxes (¥0), and only pays the per capita basic amount (均等割額) of ¥5,000* for residents taxes.

Overall it is then a 155,000/2,000,000=~8% tax rate. I.e. ¥1.85M take home from ¥2M public pension income for this example.

*The 均等割額 is scheduled to drop back to ¥4,000 from 2024

[Tkydon]

Thanks for the corrections. I updated my notes and made some changes to the calculations above.
And, I had completely missed the 1,300,000 to 3,300,000 increase in the lowest band of the Public Pension Table when I made my notes...