Thoughts on my company's DB「選択型退職金制度」?

[Roger Van Zant]

My company gives us the chance of paying into something called a <DB「選択型退職金制度」>.
I did a bit of research.
It seems 選択型退職金制度 can either be done as a DB or as a DC type.
The company which administers my company's scheme is this one :
https://www.benefitdb.jp/

I asked if I could also start my own iDeCo, even though I am already paying into this existing scheme.
The answer was "Yes". Good to know. Not sure what my maximum monthly allowable contribution to the iDeCo will turn out to be though. Anyone know?

I was also told there was no upper limit on how much I can pay into this company scheme, but that I can't pay in an extreme amount like my entire salary(!). I currently pay in 10,000 yen per month; have been since 2016.

I can't say I am blown away by the interest rates : https://www.benefitdb.jp/feature/computation.html
Erring on the side of caution, at a rate of 0.5%, and paying in 10,000 yen per month, after twenty years I can only expect 2,517,500 yen.
I found an article and used Google Translate to try to understand it : https://news.livedoor.com/article/detail/9168608/?p=1
Am I right in thinking the interest rate is so low because the scheme uses Japanese government bonds as its basis?
So it is an ultra-cautious investment approach?

I was going to increase my monthly contribution to 20,000 yen per month, but now I am thinking to put the additional 10,000 yen in a fund such as eMAXIS Slim or Vanguard S&P500 through my SBI account.

We all received this explanatory, typically cartoonish(!) Japanese PowerPoint when the scheme was introduced :
https://ibb.co/tP0Kz9Z
https://ibb.co/Jq0LZcb

Anyways, anyone else paying into a similar scheme? Can anyone confirm from the above article why the interest rate is so low?!

Thank you for your time as always.

[Roger Van Zant]

I'm just bumping this up to see if anyone has any thoughts?

[Kanto]

It seems ultra-conservative. They appear to be focusing on government bonds. That would explain the low returns.

Is this your only option? I would pursue setting up you own iDeco account for sure. Even if you can only contribute 1-2万 due to you company offering a DC plan already, it is worth it.

[adamu]

I asked if I could also start my own iDeCo, even though I am already paying into this existing scheme.
The answer was "Yes". Good to know. Not sure what my maximum monthly allowable contribution to the iDeCo will turn out to be though. Anyone know?

Probably the simplest thing to do would be to start an application, and get your company to fill out the form that gives you the answer. You don't have to follow-through with the application after that, but you can use the information to make a more informed decision.

[Roger Van Zant]

I asked if I could also start my own iDeCo, even though I am already paying into this existing scheme.
The answer was "Yes". Good to know. Not sure what my maximum monthly allowable contribution to the iDeCo will turn out to be though. Anyone know?

Probably the simplest thing to do would be to start an application, and get your company to fill out the form that gives you the answer. You don't have to follow-through with the application after that, but you can use the information to make a more informed decision.

Indeed. Thank you.

[Roger Van Zant]

It seems ultra-conservative. They appear to be focusing on government bonds. That would explain the low returns.

Is this your only option? I would pursue setting up you own iDeco account for sure. Even if you can only contribute 1-2万 due to you company offering a DC plan already, it is worth it.

Yes, I was thinking the same. Thank you.

[Roger Van Zant]

It seems ultra-conservative. They appear to be focusing on government bonds. That would explain the low returns.

Is this your only option? I would pursue setting up you own iDeco account for sure. Even if you can only contribute 1-2万 due to you company offering a DC plan already, it is worth it.

I contacted my company's HR and asked if I could quit the company DB plan, and transfer the funds currently there to my new iDeCo through Monex. The answer was no. I would have to quit my company, or retire, in order to be able to do this.
I can still open an iDeCo, of course. I believe that since I already pay 10,000 yen per month into the DB plan, I can only pay a maximum of 12,000 yen into my new iDeCo. I will update the forum on this when I know for sure.
My company explained that the DB plan is basically to enable employees to retire with 退職金, since my company doesn't provide this for non-executives. I think that is why they use this company called "Benefit One", who seem very risk averse and not worried about low returns....