(See here for a more detailed explanation of the pension system)

Japan’s Employees’ Pension Insurance (Shakai Hoken) offers significant advantages over the National Pension System, providing enhanced protection for both contributors and their families.

The Employees’ Pension has both a basic component (like the National Pension) and an earnings-related component, providing a substantial increase in total benefits. While both systems provide a Basic Pension of 816,000 yen annually with 40 years of contributions, the Employees’ Pension adds an earnings-related component that ensures retirement benefits better reflect workers’ career earnings and contributions.

Disability coverage under the Employees’ Pension system is particularly comprehensive, offering three grades of benefits compared to the National Pension’s two-grade system. This approach provides more precise alignment between benefit levels and the severity of disabilities, ensuring fairer compensation.

The system also provides superior survivor benefits, combining the basic pension with an earnings-related component. This dual structure ensures better financial security for bereaved families, acknowledging the significant impact of losing a family breadwinner.

This shared contribution system effectively doubles the investment in workers’ retirement, making it a fairer burden on individuals. While National Pension contributors bear the entire cost of their premiums, Employees’ Pension contributions are matched by employers. The system also provides additional benefits for dependents, recognising the importance of family support.

For those with international careers, these agreements allow individuals to combine their pension contributions from multiple countries, ensuring they don’t lose their pension benefits when working abroad.

The Employees’ Pension system stands as an essential pillar of Japan’s social safety net, offering far-reaching benefits for both present and future generations, proving to be a far more robust and secure system for modern workers compared to the basic National Pension.