Pension questions

[seb]

I am only turning 32 but have paid more than 6 years into Japanese pension already. Part as a regular employee and part as self-employed so with the kokumin nenkin.

If I am reading this right, I would be eligible for 237,687¥ per year from the Japanese Pension system in total. Does that mean I would get that much if I stopped paying into pension until retirement age?

If I go back to Europe one day, can I still get that money once I reach retirement age? Or do I have to be a current resident of Japan? What if I am Permanent Resident, but living in Europe at that time?

My girlfriend is Japanese, would she be able to receive her pension if she started living abroad?

[Beaglehound]

You need to pay in for 10 years to get anything at all. Provided you have done that, it doesn’t matter where you live, it can be paid outside of Japan. Same applies to your wife. You could choose to get a partial refund on what you have paid already if you leave Japan for good. There is something called karakikan which enables you to count years spent out of Japan towards the ten year minimum payment period but I suspect it only applies to permanent residents or Japanese citizens. Others may know more about that than I.

[UBear]

Seb, thank you for the post.

Mine current pension prediction is similar and I am very interested to know the probable end outcome.
I however have been here close to 20 years and have had a number of companies do the wrong thing and not pay into the scheme.

[StockBeard]

Seb, if I recall correctly you're French.

There are retirement pension agreements between France and Japan. They basically say that you get your full pension as long as you work your full 40-42 years combined in the two countries. If I oversimplify, imagine you worked 6 years in Japan and 36 years in France. The sum would be a total of 42 years, meaning you're entitled to full pension.

The math then would mean that you get roughly
6/42th of a Japanese pension + 36/42th of a French pension. The devil's in the details of course but that's the gist of it. What that means exactly for the numbers you're showing on your sheet, tbh I have no idea. But to answer one of your questions, yes, if you go back to Europe (France specifically as it's the one I know), you're entitled to "some amount" of the JP pension, even if you don't live in Japan.

The complex answer: https://jp.ambafrance.org/IMG/pdf/Conve ... 0cb0c39802
(see "Titre III" section. I won't pretend I understand everything)

Edit: and a short summary of the agreement here: https://www.cleiss.fr/docs/textes/conv_japon.html

[seb]

Hello

Thank you everyone for the answers.

I hope I don't have to work 42 years, especially since I started working at 25. But I see contributing a minimum of 10 years is bare minimum at least.

I found the document for the tax treaties and now the pension agreements between France and Japan (thx Stokebeard), but is it realistic to get it right without a tax professional? Either tax website make confusing explanations to make me feel hopeless about doing it alone, or it's just that hard...

[eagleyes]

Seb,

It is not that difficult. I am also French and I have investigated this issue before. It really depend what will be your professional situation in the future i.e. will you stay in Japan or go back to France or to another country. The good thing is with the social security agreement between France and Japan as StockBeard mentioned you can cumulate the working periods in each country to obtain a full pension under the French pension system. If there were not an agreement, you would need to work 10 years in Japan to get your Japanese pension but you would need to work 42 years in France or buy back semesters to get a full French pension.

[StockBeard]

Hey seb, if you ever go back to France, when time comes to get your retirement, my understanding is that your case would be handled by your local "caisse de retraite". You would basically give them your French info, as well as your JP pension book number + info on how many months you paid for Nenkin in Japan, and they would figure it out on your behalf with Japan, then the rest would be pretty much automated.

I assume something similar exists in Japan if you were to stay in Japan after retirement.

The only case you'd have to worry is if one of the two countries loses your info. It can happen of course, but I don't think a financial advisor would be able to help in such a case. If you lost your French info (pretty sure I lost mine), you'd basically have to go to your local retirement office in France, explain the situation, possibly give them the information about the last time you worked in France, and they would figure it out.

More details:
https://www.ccifj.or.jp/actus/n/news/vo ... entes.html

[shonanscotto]

In terms of contributions, is what you personally put in what you personally get out (with interest and growth)?

By that I mean, are a person's individual contributions their contributions and put into a sperate account so to speak, like in the Australian superannuation system, and possibly in the States with their individual 401Ks?

It is my understanding that the national pension system here in Japan is like a big pot, as in all contributions are pooled together and paid out to whoever is currently retired. That is why the issue of so few workers working to provide so many elderly retirees is such a national burden.

Am I right here?

[RetireJapan]

Nenkin works the way the UK pension does: you pay in according to the rules, and receive a pension based on the rules.

Japan currently has a pension fund (worth 1.6 trillion dollars), and individual payments coming in. They also have individual payments going out. I am pretty sure the government would top the fund up if they needed to in the future, so while pensions may be slightly smaller in the future I can't see many scenarios where we wouldn't get one.

[shonanscotto]

Thank you for your reply and cautious wording.

My take on that is there is there is very good reason for concern in regards to the 'pension pot' not being sufficient for future recipients of current and ongoing individual payments from all current employees paying into the Nenkin fund (pension pot). Would that be fair to say?

Knowing that, action by individuals to open other pension related accounts and investments (IDeCo, NISA and other options etc.) individually is strongly advised, as opposed to relying on the Nenkin system alone.

Would that all be fair to say?

Thank you for your time with this.