Pension Information for English Teachers

Social Pension

(kousei nenkin, 厚生年金)

If you’re not planning to stay in Japan long-term:
dattai ichijikin, 脱退一時金

You can choose to withdrawal a portion of the pension you have paid into, proportional to the amount of time you have spent in Japan (see details here, under “Lump-sum Withdrawal Payments”). To qualify, you must have lived in Japan and paid into the pension for at least six months; the return must be filed within two years of your departure from Japan. The application form (only applicable for foreign residents of Japan) is here.

“You can file for a refund of up to 90% of your contributions provided you’ve been contributing for over 6 months but stay in Japan for less than 3 years.”

The refund is calculated by taking your average monthly remuneration over the time you paid into the pension and multiplying it by the benefit rate:

Benefit = Average standard remuneration (monthly salary bracket) x Benefit multiplier

If your final month paid in the employee pension fund is between September 2007 and August 2008, and you have lived in Japan for (benefit multipliers):

6-11 months – multiply by 0.4
12-17 months – multiply by 0.9
18-23 months – multiply by 1.3
24-29 months – multiply by 1.8
30-35 months – multiply by 2.2
36+ months – multiply by 2.6

A refundable 20% withholding tax will be deducted from this total. The tax can be recovered however, minus a fee, by signing up with a tax agent before you leave Japan.

National Pension

The same procedure can be used to get a lump-sum withdrawal of the money you’ve paid into the pension (dattai ichijikin, 大体一時金). However, it’s calculated differently:

Time in Japan
6 – 12 months, ¥41,580
12 – 18 months, ¥83,160
18 – 24 months, ¥124,740
24 – 30 months, ¥166,320
30 – 36 months, ¥207,900
36 months or more, ¥249,480

No withholding tax is taken from the national pension withdrawal.

“The National Health Insurance is managed by ward offices in big cities and by small town government offices. Although it is a “national” insurance, each municipality is receiving funds and paying the claims. They are like a group of small insurance companies. They are all in the red. Some are just redder than others. As a result, insurance rates vary from one city to another. Even Japanese feel cheated by this disparity.”
Source: http://www.nationalhealthinsurance.jp/nhi.asp

This website goes on to point out how easy it is to be trapped in the National Insurance system; if you’re leaving the country, it’s generally not a problem, but once you’re signed up, it can be difficult to switch to a private company. Some have tried moving without forwarding their address to the insurance, leaving Japan on paper, or just presenting the proper paperwork and taking their chances:
Source: http://www.nationalhealthinsurance.jp/getoff-nhi.asp

Pension Timeline

The amount refunded is based on the time in Japan, not the actual Yen paid. As a result, since my former employer took a few weeks to get me signed up for the pension, and I technically only paid into it for 11.49 months, I received only 40% of the total pension payments, as opposed to 90% if I had stayed between 12 and 17 months. Isn’t bureaucracy fascinating?

But regarding the timeline…

June 11th, 2008
Mailed my pension refund paperwork from Beijing.

October 14th, 2008
Received notification that my pension will be deposited into my American bank account.

I was just about to contact the Social Insurance Operation Center in Tokyo at 81-3-6700-1165 and test my poor financial Japanese to attempt and learn the status of my application. Thank god that’s no longer necessary.

So, based on these facts, it takes approximately four months from mailing in the pension to financial results.

128,000 Yen with 25,600 in taxes for a net total of 102,400 Yen.

Now all that remains is to get that 25,600 Yen back as a tax refund by forwarding the refund notification to my designated “tax agent” in Japan (a process that involved enough paperwork and research in itself).

Questions about this? About to leave Japan yourself and want some money back? Email me at turner[at]onceatraveler.com.

Useful forum with more information

The tax refund

So… by now you’ve received your Japanese pension refund after 6-36 months service in Nippon. A few hundred thousand yen in your trusty bank account. Now, what to do to receive the tax refund? After all, it’s 20% of your total pension refund.

Well, for one, you should have designated a tax representative to act on your behalf before you left Japan. If you didn’t do this, it’s too late for you. Sorry. Tax representatives can be appointed with a “Declaration Naming a Person to Administer the Taxpayer’s Tax Affairs (for use by aliens)” form at your local tax office. If you need the kanji for the paperwork, it’s 納税管理人の届出書（外国人用）.

1. In Japan, file your 納税管理人の届出書 form at a tax office.
2. Outside Japan, send in your pension refund paperwork.
3. Receive the pension refund receipt. Mail the original receipt to your tax representative in Japan. He or she will then go to the tax office and file the final paperwork (確定申告書) on your behalf.
4. Your tax refund will be deposited into your tax representative’s Japanese bank account.
5. Your tax representative can mail you an international money order or wire the refund.