Japan’s pension system is designed around one basic idea: people build pension coverage throughout much of their adult lives so they can receive income later in life. However, many workers are unsure how the system actually works. Some pay pension contributions directly, while others have contributions deducted from their salary through their employer. Some workers hear the term 社会保険 (shakai hoken) but do not realize that it includes pension coverage.

Understanding which pension system you are enrolled in—and who is responsible for making those payments—is essential. Missing years of pension contributions can affect your retirement income for many years to come.

National Pension (Kokumin Nenkin – 国民年金): The Foundation of Japan’s Pension System

The National Pension is the foundation of Japan’s public pension system. In principle, everyone living in Japan between the ages of 20 and 59 is covered by it. Workers enrolled in Employees’ Pension Insurance are covered through that system, while people outside employee pension coverage normally enroll and pay National Pension contributions themselves. This includes:

• Self-employed workers
• Freelancers
• Students
• Unemployed people
• Workers who do not meet the requirements for employee pension coverage

Enrollment is generally handled through your local city, ward, or town office. People in this category are responsible for paying their own contributions, although exemptions and payment postponements may be available in certain circumstances.

The National Pension provides the basic old-age pension after the required conditions are met.

Employees’ Pension Insurance (Kosei Nenkin – 厚生年金): The Pension for Workers

Employees who work for eligible companies, universities, schools, and other organizations are generally covered by Employees’ Pension Insurance. Unlike people who enroll in the National Pension directly, eligible employees do not normally complete the enrollment themselves. The employer is responsible for completing enrollment procedures with the Japan Pension Service.

Contributions are deducted from the employee’s salary, and the employer also pays a share.

The amount of pension a worker receives depends on factors including:

• The number of years enrolled
• The employee’s salary and bonuses during that period

Because Employees’ Pension provides benefits in addition to the basic National Pension, it generally provides a higher retirement benefit than relying on the basic pension alone.

How Does Social Insurance (Shakai Hoken – 社会保険 ) Fit In?

Many workers become confused because employers often talk about “social insurance” rather than specifically saying “Employees’ Pension Insurance.”

Shakai hoken is a broader term that includes several insurance systems, including:

• Health insurance (健康保険)
• Employees’ Pension Insurance (厚生年金)
• Nursing care insurance (介護保険, where applicable)

When an employee says they are “enrolled in shakai hoken,” it usually means their employer has enrolled them in both health insurance and Employees’ Pension Insurance.

This is why being excluded from shakai hoken can have serious consequences. A worker may think they are only missing health insurance coverage, but they may also be missing months or years of pension coverage that affect their retirement.

For eligible employees, enrollment is the employer’s responsibility.

Private School Mutual Aid (私学共済)

Workers at private schools and universities may be familiar with the term 私学共済 (Shigaku Kosai – Private School Mutual Aid).

Historically, private school employees had their own separate pension system. However, following the 2015 pension system reform, private school employees became part of the unified Employees’ Pension Insurance system.

Today, Private School Mutual Aid provides private school employees with benefits such as health insurance and other mutual aid services.

The important point for workers is not simply the name of the system, but whether they are properly enrolled in the pension coverage they are entitled to receive.

Company Pension Plans (Kigyo Nenkin – 企業年金): Additional Retirement Benefits

Some workplaces provide additional retirement benefits through company pension plans. These plans are separate from Japan’s public pension system and vary depending on the employer.

Each workplace has its own rules regarding:

• Who can participate
• How contributions are made
• When benefits can be received
• What happens if an employee leaves the workplace before retirement

Employees should carefully read their workplace rules and pension documents to understand what benefits are available. It’s best not to assume every company pension operates in the same way.

Your Pension Is Built Month by Month

Your pension is not something that begins only when you retire. It is built throughout your adult life.

Whether you pay contributions yourself through the National Pension or are covered through your employer, every month counts.

If pension coverage is missing because an employer failed to properly enroll an eligible worker, the consequences may not become clear until many years later—when the worker checks their pension record or begins receiving retirement payments.

By then, the financial impact may continue for the rest of their life.

Check Your Pension Record

Checking your record regularly is the best way to make sure your pension coverage has been properly recorded.

You can check your pension history through:

• Nenkin Net (ねんきんネット), provided by the Japan Pension Service
• Local pension offices (年金事務所)
• Pension statements sent by the government

Your retirement security is built one contribution at a time. Make sure every month counts.

Compare the benefits of the employees’ and the national pension here: https://generalunion.org/wp-content/uploads/2024/11/PDF-Pension-shakai-hoken-vs-kokumin-E.docx.pdf