Pension System
See also: National Pension (Japan)In Japan there are three types of Japanese national pensions arranged by the government and corporate organizations.
- The basic pension (Category I)
- Providing minimal benefits. The basic pension (premium is a fixed amount)
- A secondary part (Category II)
- Providing benefits, based on income up until retirement. Employees Pension Insurance, Mutual Aid Pensions (Premium is a fixed percentage of monthly income)
- A third part
- Company Pensions (Employees' Pension Fund, Tax-qualified Pension Plan. The premium depends on the organization)
Enrollment in an employees' pension plan or a mutual-aid pension automatically enrolls you in the basic pension system as well.
| A secondary part | Employees Pension Insurance | National Public Service Mutual Aid Pension | Local Public Service Mutual Aid Pension | Private School Teachers and Employees Mutual Aid Pension | ||
|---|---|---|---|---|---|---|
| The basic pension | The National Pension Fund (The basic pension) | |||||
| Insured persons | Employers、unemployed persons and part time & casual workers or equivalents Salaried employees who do not meet necessary conditions for members of an employees' pension plan |
Spouses of category II insured persons |
Company employees | Public employees | ||
| CategoryⅠinsured persons | Category III insured persons | Category II insured persons | ||||
| Individual type | Worker's property accumulation promotion system |
|---|---|
| Personal type Defined Contribution Pension Plan | |
| Corporate type | Defined benefit pension plan |
| Employees' pension funds | |
| Tax-qualified Pension Plans | |
| Defined Contribution Pension Plans | |
| Retirement mutual aid pensions for small sized businesses | |
| Retirement mutual aid pensions for specific small sized businesses |
A major revision in the public pension system in 1986 unified several former plans into the single Employee Pension Insurance Plan. In addition to merging the former plans, the 1986 reform attempted to reduce benefits to hold down increases in worker contribution rates. It also established the right of women who did not work outside the home to pension benefits of their own, not only as a dependent of a worker. Everyone aged between twenty and sixty was a compulsory member of this Employee Pension Insurance Plan.
Despite complaints that these pensions amounted to little more than "spending money," an increasing number of people planning for their retirement counted on them as an important source of income. Benefits increased so that the basic monthly pension was about US$420 in 1987, with future payments adjusted to the consumer price index. Forty percent of elderly households in 1985 depended on various types of annuities and pensions as their only sources of income.
Some people are also eligible for corporate retirement allowances. About 90% of firms with thirty or more employees gave retirement allowances in the late 1980s, frequently as lump sum payments but increasingly in the form of annuities.
Read more about this topic: Social Welfare In Japan
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