Japanese Version

This service is to support a world talent, who has returned or is going to return back to his or her home country, to withdraw so-called lump sum payment of premium contributed to Japan’s public pension systems (National and Employees Pensions) during residency in Japan. This article covers the following contents:

Lump-sum Withdrawal: Benefits

Partial refund of pension premium for non Japanese who returns back to home country

World talents in Japan as a long term resident are mandated to participate in Japan’s public pension systems. In case a world talent leaves Japan without becoming eligible for receiving pension, lump-sum withdrawal of premium can be applied to refund partially what you have paid as premium.

More precisely, a world talent can apply for lump-sum withdrawal, within two years after returning back home or other countries, when the talent has paid pension premium for six months or longer or for shorter than ten years.

30% to 50% of Total Amount of Premium to be Refunded, when Participated for five years or less

Unfortunately not all of what the talent has paid as premium will be refunded. Refund amount varies, depending on individual premium history and amount. Please find further details at Amount of Lump-sum Withdrawal from National Pension and Amount of Lump-sum Withdrawal from Employees Pension.

30% to 50% of total amount of premium paid is refunded when a world talent has participated in National Pension System for 5 years or less. (The refund percentage is actually double, 60% to 100%, for Employees Pension System, because an employer subsides a half of premium of an employee.)

As in Amount of Lump-sum Withdrawal from National Pension and Amount of Lump-sum Withdrawal from Employees Pension, an upper limit is set at 5 years or 60 months as duration of participation in the amount calculation tables, and amount does not increase beyond the upper limit no matter how longer a world talent participate beyond the 5 year limit. This means that the refund ratio against the total premium paid, i.e. 30% to 50% above, declines as the participation duration gets longer.

Case Studies

  • National Pension: Withdrawal amount is approx. JPY 498,300 for those who have participated for 5 years
    • (In case where the last month of premium payment is within the fiscal year 2021)
  • Employees Pension: Withdrawal amount is approx. JPY 2,108,300 for those who have participated for 5 years
    • (In case where “average standard monthly salary” is JPY 300,000, “average standard bonus” is JPY 500,000 and “premium ratio” is 18.3%)

Taxation on Withdrawal and its Refund

Taxation on withdrawal is as follows.

  • National Pension: No tax is imposed. 100% of withdrawal amount is paid to a bank account designated by an applicant.
  • Employees Pension: Income tax of 20.42% is imposed, which is withheld by Japan Pension Service, and the reminder, approximately 80% is paid to a bank account designated by an applicant.
    • This withholding tax can be partially or fully refunded later through separate application.

Lump-sum Withdrawal: Disadvantages

Lump-sum Withdrawal is provided in return for giving up premium payment history, i.e. the payment historical records will be erased altogether as if no payment were made in the past. This side effect leads towards a shorter (or zero) premium payment period, which has the following as disadvantages of the withdrawal.

  1. Becoming less likely to be eligible for receiving pension
  2. Amount of pension becoming less

Lump-sum Withdrawal and Social Security Agreements

The disadvantages, especially #1 above, are not limited to pensions in Japan but also to the ones in home country, especially for those who come from countries that have social security agreement with Japan where the agreement includes “totalization of pension period” (which means that premium payment periods in Japan and home countries can be summed up when pension eligibility is judged).

It also has to be noted that entire history of premium payments is erased (not just for 3 years) when lump-sum withdrawal is made for an applicant with the history longer than 3 years. This may be felt as unreasonable because the withdrawal amount does not increase beyond the 3 year’s upper limit, but it is how it is implemented in law. Those, who have premium payment period longer than 4 or 5 years, should carefully review this disadvantage before raising a request for lump-sum withdrawal.

Details of the social security agreement can be found in this article.

Lump-sum Withdrawal: Eligibility

An insured person becomes eligible to apply lump-sum withdrawal when the person meets all of the following criteria:

  • Not having Japanese nationality (i.e. a Japanese national cannot apply)
  • Premium payment period is 6 months or longer and the person is not yet eligible for any kinds of pension (which typically means that premium payment period is less than 10 years)
  • Not having residential address in Japan (i.e. already returned back to home or other countries)
  • Still within 2 years after having left Japan

An insured person falling into one of the following criteria is NOT eligible to apply lump-sum withdrawal:

  • Premium payment period is less than 6 months or is (typically) 10 years or longer:
    • Less than 6 months: No withdrawal amount hence cannot apply
    • 10 years or longer: Becoming eligible for old-age pension, so that becoming not eligible for lump-sum withdrawal
  • Not participating Japan’s pension because of the social security agreement

For details of the social security agreement, please refer to this article.

In case an Insured person dies, prior to or after application of Lump-sum Withdrawal

In case an eligible insured person dies without receiving lump-sum withdrawal, a spouse, a child, a parent, a grandchild, a grandparent, a brother, a sister or other relative with the three degree of relationship, who shared the same livelihood at the time of death, can receive the withdrawal payment on behalf.

Defined Contribution Pension (Corporate Type, iDeCo) – Difficult to Withdraw before Age 60

 Up to here, lump-sum withdrawal from public pension (National and Employee Pensions) are discussed. Some world talents subscribe also Defined Contribution (“DC”) pension (Corporate Type, iDeCo). At time of writing in Feb 2020, withdrawal criteria of DC pension are too stringent to be satisfied for most of cases. This situation is however seen as a problem and Social Security Council proposes improvement. So that in the near future, withdrawal from DC pension becomes more feasible through laws revisions. Please find more details in this page.

Contact Us

Hoping that this page is informative to you. Please feel free to contact us for details or application support:

Phone:03-5656-1956
Contact by email