Will Years Of Pension Non-Enrollment Come Back To Haunt You?

We were all young once (and some of us still are!), but it's never too late to deal with pension problems.

Today, we're going to examine the case of a teacher - we'll call her "Joy" – who, after twenty-five years of service to her employer, found that she was going to take a big loss to her future pension earnings…

First, let's quickly look at what a pension is, and how you qualify for it.


In Japan, there are two main types of public pensions: kokumin nenkin (National Pension) and kosei nenkin (Employees' Pension Insurance).

To keep it simple: kokumin nenkin is basically for the self-employed, the unemployed, or for those who are very part-time. It's a standard monthly premium, regardless of income, and the monthly pension you can receive is about seventy-thousand yen - even after thirty years of premium payments.

There is some disagreement about eligibility but, basically, if you work fairly regular, longish hours, this one is not for you; you should be enrolled in kosei nenkin (which is part-and-parcel of shakai hoken and shigaku kyosai).

Kosei nenkin premiums, however, are based on your wages and other earnings, and the payout is based on the amount you paid in over the years. Therefore, you usually get a lot more in benefits than you do from kokumin nenkin.

For Joy, there is no argument as to her eligibility to be enrolled in kosei nenkin - not only according to the union, but to her employer as well. Why do we know this? Because, nine years after she started working there, she and her co-workers formed a union branch and forced the employer to enroll them as per the law - and with no argument from her employer about eligibility, she was enrolled there and then.

This should be the happy ending to the story, but unfortunately it's not.

As you'll see below, the only happy part is that she had a union willing to fight for her.


Joy had just retired and, after twenty-five years of hard work, looked forward to her retirement years - until she found out about her monthly pension.

She didn't expect to be a millionaire in retirement, but figured that after twenty-five years of working in Japan she'd have a decent pension to depend on during her retirement days.

Unfortunately, this wasn't the case at all.

A quick call to the General Union - the union that she had had been a member of for seventeen years - confirmed the problem: there was a shortfall.

The shortfall didn't lie with Joy, but with her employer - an employer who had failed to enroll her for the first nine years of her employment...


Before we continue, let's clarify a small but important point:

**Please note that the information below was written prior to the change in the pension law in late 2016 reducing the enrollment qualification from twenty-five to ten years. 

Joy worked at the company for twenty five years - exactly the minimum number of years required to get a pension - but she wasn't enrolled for the first nine years, thereby rendering her ineligible if it weren't for "kara kikan" (for permanent residents in Japan, the number of years between the ages of twenty and your age when you came to Japan).

She was forty years old when she came to Japan, so twenty (40-20), plus sixteen years of enrollment at her company, meant that Joy had cleared the twenty-five year hurdle to receive the pension.

However, while kara kikan works for eligibility, she still lost out on the amount of the entitlement because of her non-enrollment during the first nine years of her time in the country.

So, what could she do?


Thankfully, Joy's numerous years of union dues weren't wasted. Instead of having to immediately go to a lawyer, she had her union to support her.

The General Union asked a social insurance accountant to check what she would have received had her employer enrolled her from the beginning of her employment, and the union made this exact monetary demand on the employer. We're still in the midst of negotiations, but we're confident that we'll win - either at the bargaining table, or on the court bench.

But what excuses can the employer even make to counter the union's demands for payment?

Well, this is what they said:

"Joy never asked to be enrolled during her first nine years."

Enrollment is not based on an employee request. Only the employer can enroll and it is completely the employer's duty to enroll. In fact, you cannot refuse enrollment; it's a tax which you are required to pay 50/50 with your employer.

Unfortunately for them, public insurance is not based on the individual agreement of each worker and employer - it is a public duty which cannot be refused by either party.


We'll know soon enough how it turns out…

Negotiations were relatively simple because she had already made up her mind to sue if they refuse.

We, the union, met with the company tonight (March 24th, 2016), laid down the law, and told them that while they CAN refuse our demands, we will take them to court if they do.

We have enough years of court precedent to feel confident that she'll win and that the employer will just lose legal fees.

We're not bluffing, either - both the law and JUSTICE are on our side.


Were you young, once, and thought you'd never need that pension that your company was required to provide, but never did? It's not too late to make up for lost time!

The first place to start is with your union!



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