RetireJapan

Since returning to the corporate world after many years in a sole-proprietership, we've been much more focused on our retirement savings. While the great information found here and on the internet has helped my understanding of my own company's retirement benefits, I've run into a bit of a wall trying to understand my wife's.

She works as a nurse at a hospital, and she was told that her "taishokukin" retirement payment acrues monthly based on a 5,000 yen deduction from her paycheque. She believes she was told that the hospital pays some amount on top of that (amount unknown), and that at retirement she will receive an amount "in excess of what she's paid in over the years."

My question is, what kind of retirement payment could this be? It's clearly not DC, but is this DB with some form of employee contribution? Is it something else completely? Is this form of retirement payment common for hospitals, etc.?

(Of course, I've asked her to speak with her personnel department, but I doubt that will ever happen.)

If anyone has any experience with this, your insight would be appreciated.

It would appear to be DB. The Hospital probably pays an amount equal to a %age of Total Income to an Insurance Company, and then you wife pays the employee contribution of Y5,000. The hospital HR should be able to tell her how they decide the amount of the hospital's contribution.


She doesn't have control over how the funds are invested, but the insurance company will guarantee a annual minimum %age return on the sum of the monthly contributions.

The hospital's contribution is not accounted for, so is not taxable at all. Your wife's contribution is from Gross Income, but will be Tax Free.

When your wife receives the payout, it will be taxed at a very advantageous rate, completely separate than any other income in the same year;

Special Deduction per year of Service - 400,000 per year for the first 20 years,and 700,000 per year for years over 20 years.
The remainder (if any) will then be divided by 2
The remaining half (if any) will be taxed at the standard Marginal Tax Rates, but this is very low taxation, and is completely separate than any other income in the same year, so very advantageous.

If she can increase contributions, it might be worth considering.

If not, and if she has any remaining allowance, it might be worth considering opening, or continuing to contribute to, an iDECO to the maximum amount available.

Thank you very much for your response.

After some research, we determined that my wife's retirement allowance is the Smaller Enterprise Retirement Allowance Mutual Aid (SERAMA) (中小企業退職金共済). She has a certificate that states she is enrolled in such.

I realize that we're not going to get to the bottom of any of this if she doesn't discuss the matter with her HR department, but I thought I would inquire here to see if anyone had any insight before going down that (decidedly unpleasant) road.

The confusion (now compounded) stems from the fact that such SERAMA contributions are supposed to be 100% funded by the employer, yet she has a 50/50 (employee/employer) amount deducted from her salary every month (after tax) that matches with the Tokyo Council of Social Welfare Worker Mutual Aid Association (東京社会福祉協議会 従事者共済会) tables.

That would be fine, except the rules of the Smaller Enterprise Retirement Allowance Mutual Aid (SERAMA) state that an employee can't be enrolled in two different retirment plans at the same time.

Does anyone have any experience or insight into this?