Skip to main content

How the Japanese Pension System Works for Foreign Residents

How the Japanese Pension System Works for Foreign Residents (2025 Guide)

Japan’s public pension is part of the national social security system alongside health insurance and employment insurance. If you live and work in Japan, you will be required to enroll and contribute.

1) Different types of Pension Plans

  • National Pension (Kokumin Nenkin): For the self-employed, freelancers, part-timers, and students (ages 20–59).
  • Employees’ Pension (Kosei Nenkin): For company employees; premiums are shared by employee and employer and deducted from salary.
  • Private/Optional Plans: e.g., corporate DC plans or iDeCo for additional retirement savings.

2) How Contributions Work (2025)

  • National Pension: Flat monthly premium (FY2025) of ¥17,510.
  • Employees’ Pension: Income-based premium at a total rate of 18.3% of standard monthly remuneration, split roughly 50/50 between employer and employee. Deducted automatically from payroll.

3) How Benefits Are Calculated

  • Benefits depend on years of coverage and (for Employees’ Pension) your income level.
  • You generally need a minimum of 10 years of qualifying coverage to receive pension benefits in retirement. (Totalization with treaty countries may help meet the 10-year minimum.)
  • If you leave Japan permanently before reaching 10 years, you can usually apply for a Lump-Sum Withdrawal Payment (see below).

4) Lump-Sum Withdrawal Payment (when leaving Japan)

If you are a non-Japanese national and lose your insured status when you leave Japan, you can apply within 2 years for a one-time refund of a portion of your contributions.

Eligibility (summary)

  • Non-Japanese national
  • Covered for at least 6 months in National Pension and/or Employees’ Pension
  • No registered address in Japan at the time the claim is received
  • Have not acquired the right to receive a Japanese pension

What you’ll need

  • JPS claim form (Lump-sum Withdrawal Payment Claim Form)
  • Passport copy
  • Proof you no longer have an address in Japan (e.g., deleted residence record)
  • Bank details (foreign account is fine)
  • Your Basic Pension Number (from the pension book/number notice)

Payment & tax basics

  • Application deadline: Within 2 years from the date you no longer had an address in Japan.
  • National Pension LSWP: Calculated by a formula using the flat premium and your paid months; up to 60 months are counted if your last paid month was April 2021 or later.
  • Employees’ Pension LSWP: Based on your insured salary class and months of coverage (also capped at 60 months if your last paid month was April 2021 or later).
  • Withholding tax: Employees’ Pension LSWP is subject to 20.42% withholding at source (you can often claim a refund via a tax representative). National Pension LSWP is not withheld at source.

Example: Typical Lump-Sum Refunds

To give a clearer idea, here are approximate examples based on official formulas:

  • National Pension: Premium is ¥17,510/month (FY2025). The formula is roughly 0.5 × monthly premium × months paid (max 60).
    • 36 months paid ⇒ about ¥315,000
    • 60 months paid ⇒ about ¥525,000
  • Employees’ Pension: Based on salary and insured months. For a typical full-time worker earning ¥350,000/month:
    • 2 years coverage ⇒ about ¥300,000–¥350,000 (before 20.42% tax)
    • 5 years coverage ⇒ around ¥550,000–¥600,000 (before tax)

These figures are examples only. Actual payment varies depending on contribution records and base salary class. Tax withheld on Employees’ Pension can usually be reclaimed if you appoint a tax representative before leaving Japan.

5) Where to Get Help / Official Sources

6) Practical Tips

  • Keep your pension book/number safe; you’ll need it to claim or totalize periods later.
  • When leaving Japan, file your moving-out notice and close pension/health insurance accounts with your city office.
  • If you return to Japan later, your previous coverage records remain valid (unless you took a LSWP that erased those months from your record).
  • Consider appointing a tax representative in Japan before departure if you plan to reclaim withholding on Employees’ Pension LSWP.

7) Related Reading

See our companion guide: Health Insurance in Japan (2025 Guide).

Notes: Policies and amounts are updated periodically; always confirm the latest details on Japan Pension Service and MHLW before you apply.

Labels:

Popular posts from this blog

Why Your Japanese Bank Account Can Suddenly Be Frozen (And How to Fix It)

Why Your Japanese Bank Account Can Suddenly Be Frozen (And How to Fix It) One of the most alarming experiences for foreign residents in Japan is discovering that their bank account no longer works. You may notice: Your debit card is declined Online banking access is blocked Transfers fail without explanation This often happens without warning , which makes it especially stressful. This article explains why Japanese bank accounts are sometimes frozen , the most common triggers, and what you can realistically do to fix the situation. First: What “Frozen” Usually Means In most cases, a frozen bank account in Japan does not mean your money is gone. It usually means: Transactions are temporarily restricted The bank requires confirmation or updated information Access will be restored once the issue is resolved This is an administrative lock, not a punishment. The Most Common Reason: Address Mismatch The single most common reason accounts are f...
Read more

How Redelivery Works for Large Items in Japan

How Redelivery Works for Large Items in Japan (Furniture, Appliances, Oversized Parcels) – 2025 Guide Large deliveries in Japan—like refrigerators, washing machines, furniture, or big home electronics—use a different system from normal parcels. This often surprises newcomers, because the usual 不在票 (fuzaihyo) process doesn’t always apply, and many carriers require special scheduling or phone confirmation. If you’ve ever missed a large-item delivery or weren’t sure how to arrange redelivery, this guide walks you through what to expect and how to rebook it smoothly. If you’re still setting up your apartment, our guide on renting an apartment in Japan may also help with the early steps of getting settled. Why Large Items Use a Different Redelivery System Large items in Japan require more coordination because they often involve: Two delivery staff instead of one Special equipment (dollies, straps, lifts) Time-specific building access rules Installation work (washin...
Read more

How to Send and Receive Money Internationally from Japan (2025 Guide)

How to Send and Receive Money from Japan International transfers from Japan can be slow and expensive if you only use traditional banks. Requirements also vary by provider: some ask for My Number, others for specific proof of purpose. This guide explains the practical options in 2025, what documents you need, how to reduce fees, and when to choose banks vs. fintech services. 1) How International Transfers Work from Japan Traditional banks: MUFG, SMBC, Mizuho, Japan Post Bank send money via SWIFT. Reliable but fees add up: sender fee + intermediary fee + poor FX. Online/fintech services: Wise, Revolut, Payoneer use local accounts/networks to cut FX and speed up settlement. Clear fee breakdown and app-based tracking. Compliance/KYC: All providers verify identity and may ask for purpose of remittance and source of funds. Limits increase after full verification. 2) Documents You’ll Typically Need Residence card and passport My Num...
Read more