Kokumin Nenkin and Kosei Nenkin
Japan has a unique public pension system in the world. It provides residents with two kinds of pensions – “Kokumin Nenkin” (国民年金, National Pension) and “Kosei Nenkin” (厚生年金, Employees’ Pension Insurance).
Employees hired by employers are registered in Kosei Nenkin. All the other residents are registered in Kokumin Nenkin. These two pensions are both managed by Japanese government, but they are quite different in contributions and payments.
Kosei Nenkin takes its revenue from employees’ monthly salaries and bonuses, that is called Gensen Choshu(源泉徴収). How much insured members contribute are in proportion of the amount of each employee’s salary and bonus.(*)
(*) A maximum contribution amount is also set.
On the other hand Kokumin Nenkin takes its revenue from direct contributions by Japanese residents. Japan Pension Service (special public cooperation for the management of Japanese pensions) sends a bill for pension contribution to all the insured members of Kokumin Nenkin, once in a year. Insured members can pay it at banks, convenience stores, etc. It is not withheld by Gensen Choshu but you need to pay it by yourself. Contribution amount is constant, no matter how much an insured members’ incomes are.(*)
(*) Low-income earners, students, or dependents in family are permitted to pay less or exempted from paying.
Kosei Nenkin is ” Give More and Take More” than Kokumin Nenkin
Non-Japanese people living in Japan are registered either in Kosei Nenkin or in Kokumin Nenkin. The former are employees hired by Japanese companies. The latter are other than them – dependents in family, students, and permanent or long-term residents who are not hired by Japanese companies.
Kosei Nenkin’s monthly contributions are relatively a large amount because they are (basically) in proportion of monthly salary and bonus. So old age payments (from age 65) are also relatively big. Non-Japanese employees also contribute Kosei Nenkin, and they can claim its refund as “Lump-sum Withdrawal Payments”. Non-Japanese employees can receive Lump-sum Withdrawal Payments just after they leave Japan. The amounts of employees’ Lump-sum Withdrawal Payments are also relatively a large amount.
On the other hand Kokumin Nenkin’s monthly contribution is a constant amount and it is relatively small. So its old age pension payments as well as Lump-sum Withdrawal Payments are also relatively small.
For Detailed Information..
- National Pension System (Japan Pension Service’s website, External Link)
- Employees’ Health Insurance System and Employees’ Pension Insurance System (Japan Pension Service’s website, External Link)
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(Oda Mitsuo, YouAT LLC)