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New MHLW Announcements To Date. Since January 1, 2025 (Reiwa 7)
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JANUARY 2025
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Article 1.
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Japanese and English Summary of Participation Requirements
Increased Publication of Foreign Employee Enrollment in the Japanese Pension System.
This increased publication and promotion, includes increased local government investigation as to foreigner participation in the mandatory Pension System.
Japanese Detailed Description of Promotional Efforts.
In accordance with National Pension Law, the Japan Pension Service requests local governments to report on information on the nationality of residents, as to their Pension Contribution Status.
Japan’s Public Pension System
The public pension system, consisting of the National Pension system (NP) and the Employees’ Pension Insurance system (EPI), pays you insurance benefits not only for old age but also for unforeseeable events such as disability and death. The benefits are paid on condition that you pay monthly contributions.
All residents of Japan, regardless of nationality, aged between 20 to 59 (up to 70 years old for the EPI) must enroll either in the NP or in the EPI,
*If your workplace is covered by the EPI, you need to enroll in the EPI
* If you are temporarily (not over 5 years) sent to work in Japan from the country that has a social security agreement with Japan, you may be exempted from compulsory coverage by the Japanese public pension system.
Key points of National Pension system
If you are not covered by the EPI, you need to do the procedure for yourself to enroll in the NP at your residential municipal office.
The NP provides benefits when you become old, you have severe disability due to an illness or injury, and / or the income earner of a family dies
Old-age pension and disability pension will be paid to you while survivors’ pension will be paid to the dependent survivors, including spouse and children In order to receive benefits, you must meet the relevant children requirements.
You need to pay NP contribution: 16,980 yen* per month
* Monthly amount for fiscal year 2024 (from April 2024 to March 2025)
If it is financially difficult to pay NP contributions, you may apply for exemption of contribution.
If you meet certain requirements such as low income or unemployment, contribution exemption is granted. Students may apply for special payment system to postpone the contribution payments.
Key Points of Employees’ Pension Insurance system
■ If your workplace is covered by the EPI, you must enroll in the EPI.
■ Your employer is responsible for your enrollment procedure. Half of your contribution amount is paid by your employer and half by you. Your employer deducts your contribution from your salary, and pays it together with their share to the government.
■ The EPI also provides old-age pension, disability pension, survivors’ pension, and lump-sum withdrawal payments.
If you have any questions about the public pension system, please contact your residential municipal office, a JPS branch office or call Nenkin Dial, a call center with free interpretation service for several languages.
For more information about the public pension system, please visit the Japan Pension Service website.
https://www.nenkin.go.jp/international/index.html
Article 2
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Japan’s MHLW Contemplating Corporate Pension and Individual Pension Revisions
The Corporate Pension and Individual Pension Subcommittee of the Social Security Council announced the “Organization of Discussions in the Corporate Pension and Individual Pension Subcommittee of the Social Security Council”. While these are not yet law, companies would be wise to take notice and be ahead of such revisions so as to better serve their employees retirement needs.
●Rise the upper limit of the age limit for joining iDeCo (Independent Defined Contribution Plan)
→ In addition to the current requirement for national pension-insured persons, some have joined a private pension while paying insurance premiums for public pensions and used iDeCo from the ages of 60 to 70 so that they can continue to build assets in their old age. Those who intend to continue asset formation in old age (specifically, those who were members and management instructions ofiDeCo and those who transfer assets of private pensions (such as corporate DC to iDeCo) and receive basic old-age pensions and iDeCo old-age benefits. Those who have not been given should be allowed to join and continue to contribute to iDeCo.
●Increasing the upper limit of the age at which iDeCo can be started
→ We should continue after 75 years old, and after looking at the situation of those who start receiving benefits after the age of 70 after April 2020, etc., we should carefully discuss whether to raise the age of starting benefits further.
●iDeCo’s contribution limit
→ The contribution limit of iDeCo’s No. 2 insured person will be reviewed so that they can contribute up to the common contribution limit combined with the corporate pension, even if there is no corporate pension or if the employer’s premium is small.
→ The contribution limit of iDeCo should be reviewed based on changes in the economic and social situation in conjunction with the contribution limit of corporate DCs.
●Contribution limit for corporate DCs
→ The contribution limit of corporate DCs should be reviewed based on changes in economic and social conditions such as rising wages.
→ Regarding the matching contribution of corporate DCs, it is necessary to review the restrictions that cannot exceed the employer’s contribution amount.
●Simple DC system
→ After its establishment in 2018, it was thought that there was no track record of use and it did not meet the needs of small and medium-sized enterprises, so some of the simplified procedures applied to the simplified DC were applied to normal corporate DC, so the normal enterprise For business DC, we should improve the design that is easy for all business owners, including small and medium-sized enterprises, and integrate simple DC into normal corporate DC.
●Small and medium-sized business owner’s premium payment system (iDeCo+)
→ As for the scope of small and medium-sized business owners that can be implemented, it will continue to be less than 300 people, and we should work on promoting dissemination and increasing the number of subscribers.
→ The combination of iDeCo+ and DB should be carefully considered
●Comprehensive DC
→ There is no legal definition, but for the so-called “comprehensive DC” in which multiple offices that do not have a close relationship with business and capital jointly implement corporate DC, refer to the provisions of the comprehensive DB, position it institutionally, and grasp the actual situation Should
→ Measures to improve initiatives related to the development of rules, selection of operational products, monitoring, and the implementation of continuous investment education should continue to be considered.
●DB system design
→ For changes in the benefit design due to the extension of the retirement age, etc., while continuing to follow the current judgment criteria for the reduction of benefits in principle, certain requirements such as increasing the nominal amount of benefits are met, and the subject to changing the benefit design of DB If there is an agreement from a labor union organized by more than two-thirds of the entrants, it should be exceptionally not treated as a “benefit reduction”
●So-called selective DB and selective DC
→ In the so-called selective DB, as in the case of DC, it should be added to the DB’s notice of interpretation of laws and regulations so that the employer should explain the impact on the amount of benefits such as social insurance and employment insurance to employees.
→ On top of that, we will proceed with efforts to ensure that employees are accurately explained to the impact on benefits in the social insurance system, including disability pensions and survivor pensions, at the time of labor-management consultations, introduction, and enrollment.
●Automatic transfer
→ As a response to be taken by the employer, before the loss of the corporate DC subscriber qualification to the time of loss of qualification, to implement an explanation of the response to be taken at the time of loss of qualification, and to individual management assets at the time of loss of qualification for all corporate DC subscribers Continuous explanation of transfer procedures, etc. should be implemented.
●DC withdrawal lump sum
→ Based on the situation and practice of reviewing the public pension withdrawal lump sum, the total contribution period should be raised from 5 to 8 years, etc.
MHLW source materials, in Japanese.
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