What is Pension?
The public pension system in Japan is a system that collects money from the working generation in Japan to help (1) the elderly, (2) those with disability due to illness or injury, and (3) family members in the event of the death of someone who was on a pension plan.
In other words, it is a system in which the entire society supports each other across generations to prepare for the unpredictable future and to realize lifetime coverage.
The premiums paid by the working generation are used to pay out pension benefits for the elderly and other eligible beneficiaries.
See Chapter 7: Pensions and Welfare of “Living and Working Guidebook” for the details.
The “Japan Pension Service” website also explains the pension system in Japan for foreigners. It is available in 15 languages.
Two types of public pension systems in Japan
There are two types of public pension systems in Japan:
- National Pension Plan
- Employees’ Pension Insurance System
Please see below for the brief explanation of each.
(1) National Pension Plan
All residents of Japan aged 20-59 are required to enroll in the National Pension Plan, regardless of their nationality.
People who are enrolled in the National Pension Plan are categorized into the following three groups.
Category I insured persons
The following people are categorized as Category I insured persons.
- Those enrolled in the National Pension Plan only
- Those who do not work for a company and run their own business (i.e., self-employed), students, or unemployed
- Anyone who does not belong to any other groups
Category I insured persons must go to the municipal office to complete the procedure.
After completing the procedure, you will receive a payment slip, which you can use to pay at a bank, post office, or convenience store.
If you have a Japanese bank account or credit card, you can pay by direct debit or credit card.
Category II insured persons
The following people are categorized as Category II insured persons.
- Those enrolled in both the National Pension Plan and the Employees’ Pension Insurance.
- Those who work for a company (If you are not sure whether you are enrolled in Employees’ Pension Insurance, check with your employer)
Category II insured persons do not need to apply for the pension at the municipal office. Your employer will take care of the necessary procedure for you.
Your employer will also take care of the payment.
Half of the payment will be deducted from your salary (the other half will be paid by your employer.
Category III insured persons
The following people are categorized as Category III insured persons.
- Those enrolled in the National Pension Plan only
- Those whose spouses are enrolled in the Employees’ Pension Insurance (Category II insured person)
- Those whose spouses are 64 years old or younger
- Those with the annual salary of less than 1.3 million yen
If you are one of the above, contact your spouse’s employer.
As with Category II insured persons, the spouse’s employer will take care of the enrollment procedures for you, so there is no need for you to apply at the municipal office.
(2) Employees’ Pension Insurance System
As explained earlier, the Employees’ Pension Insurance system is a system plan for those who work for a company.
If a person under the age of 69 who works at an applicable business office meets certain requirements, he or she is insured (enrolled) in Employees’ Pension Insurance system.
Applicable business offices include the following types of establishments.
- Corporations
- Private establishments (with 5 or more people), excluding those in the agriculture, forestry, fisheries, and service industries
- Business establishments that voluntarily enroll in the system by the labor-management agreement
Your employer will take care of the necessary procedure so you do not need to apply for it yourself at the municipal office.
Your employer will also take care of the payment.
What kind of pension will I receive?
The type of pension you will receive differs between (1) National Pension Plan and (2) Employees’ Pension Insurance.
Please see Chapter 7: Pensions and Welfare of “Living and Working Guidebook” to find out what kind of pension you will receive!
What if I cannot afford to make contributions?
For those enrolled in (2) the Employee Pension Insurance, the contributions are deducted from your salary, and therefore, you will never be in a position where you cannot pay it.
Those enrolled in (1) National Pension Insurance. must make the payment directly and you could be in a situation where the payment becomes a challenge.
For those who do not have sufficient funds to live and cannot afford to make contributions to the National Pension Plan, there is a system where you can be exempted from the payment. Please consult with the municipal office or the nearest pension office.
If you stop payment without prior consent, the municipal office may see that as failure to pay on time, and impose a late payment fee, reduce the future pension income, or even prevent you from receiving it or seize your property.
Therefore, if you are unable to make contributions, be sure to consult with the local government official!
Exemption from the Japanese pension plan (Social Security Agreement)
You could be making contributions to pensions twice if you are already enrolled in a pension plan in your home country but yet you enroll in a pension plan in Japan too.
The “Social Security Agreement” is a system that prevents you from such double payment.
Under this system, foreigners from the countries that have concluded a social security agreement with Japan are only required to join the pension plan in Japan or their home country, depending on the length of time they work in Japan.
For example,
- If you are in Japan for less than 5 years, you only need to join the pension plan of your home country.
- If you are in Japan for more than 5 years, you only need to join the pension plan in Japan.
Since the specifics may vary, please confirm the details with the pension offices in your home country and Japan!
Please refer to the “Social Security Agreement” section of this website.
Summary – Determine if you need to enroll in the system at the municipal office
Remember that those who are only enrolled in (1) National Pension Plan (i.e., Category I insured persons) need to go through the procedure at the municipal office.
For how to enroll in National Pension Plan, please go to this page.
Next, let’s find out about My Number System in Japan.
The information contained in this article is based on the information available as of August 31, 2023.
