Understanding the Japanese public pension system
Japan's public pension system, known as nenkin (年金), is mandatory for all legal residents aged 20 to 59, regardless of nationality. It is a two-tiered system, with the base level covering all residents and a second tier for employed individuals.
The two tiers of the pension system
The Japanese pension system has two main components:
- National Pension (國民年金, Kokumin Nenkin): This first tier provides a flat-rate basic pension benefit and is mandatory for all residents between 20 and 59.
- Employees' Pension Insurance (厚生年金保険, Kosei Nenkin Hoken): This second tier provides an earnings-related benefit for employees of companies and public-sector workers.
Who must contribute?
Everyone residing in Japan between the ages of 20 and 59, including foreign nationals, is required to contribute to the pension system based on their employment status. There are different categories of insured persons:
- Category 1 Insured Persons: The self-employed, students, and unemployed pay a fixed monthly contribution directly.
- Category 2 Insured Persons: Employees in the private and public sectors have contributions automatically deducted from their salary, split with their employer.
- Category 3 Insured Persons: Dependent spouses of Category 2 members aged 20 to 59 are covered without individual contributions.
Eligibility for pension benefits
To receive a pension in Japan, you need a total coverage period of at least 10 years to be eligible for the basic old-age pension at age 65. A full National Pension benefit requires 40 years of contributions; a shorter period results in a proportionally reduced benefit.
The lump-sum withdrawal payment for foreigners
Non-Japanese nationals who leave Japan permanently with less than 10 years of contributions may be eligible for a lump-sum withdrawal payment (dattai ichijikin).
Eligibility for Lump-sum Withdrawal:
- Be a foreign national who has left Japan permanently.
- Have contributed for at least six months but not be eligible for a Japanese pension.
- Apply within two years of leaving Japan.
Recent changes (as of May 2025) have increased the maximum eligible contribution period to 96 months. However, those leaving with a valid re-entry permit are now ineligible for the refund until the permit expires.
Social security agreements
Japan has social security agreements with many countries. These agreements can prevent dual pension contributions for temporary workers and allow combining contribution periods from Japan and your home country to meet eligibility requirements.
Comparison of pension types in Japan
| Feature | National Pension (Kokumin Nenkin) | Employees' Pension Insurance (Kosei Nenkin Hoken) |
|---|---|---|
| Coverage | Mandatory for all residents aged 20–59 | Mandatory for employees in covered workplaces |
| Contributors | Primarily self-employed, students, and unemployed | Employees and employers (50/50 split) |
| Contribution | Fixed monthly amount, paid by the individual | Earnings-related, deducted from salary |
| Benefit Type | Flat-rate basic benefit | Earnings-related supplementary benefit |
| Benefit Calculation | Proportional to number of months contributed (up to 40 years) | Depends on average salary and contribution period |
| Administration | Managed by the Japan Pension Service | Managed by the Japan Pension Service |
Planning for your financial future in Japan
The public pension provides a foundation, but many residents supplement it with private savings and investments. Options include:
- iDeCo (Individual-type Defined Contribution Plan): A voluntary, tax-advantaged private pension plan.
- NISA (Nippon Individual Savings Account): A tax-exempt investment account for long-term savings.
- Workplace pensions: Some companies offer additional pension plans.
Conclusion
Yes, you do get a state pension in Japan if you are a legal resident aged 20 to 59, as participation in the public pension system is mandatory. The system provides financial support in retirement, disability, or death, with benefits varying based on contribution history and employment status. Foreign nationals leaving Japan before meeting the 10-year eligibility period may claim a lump-sum withdrawal of contributions. Planning for retirement, potentially with supplementary savings, is key to financial security in Japan.
Further information on the Japanese public pension system can be found on the Japan Pension Service website.
