About hoofin

Was an American expat in Japan, with roots in Somerset County, New Jersey. Now back in Pennsylvania.

Japan benefits from US-Japan totalization—almost $10 million a year. Do we?

The 2014 version, using data from the Social Security Administration as at December 2013:

japan benefits from totalization 2013.bmp

The number of beneficiaries is now over 41,000, just behind Canada’s 52,000 plus. These are Japanese who paid into US social security, but did not earn the 10 years here, the “40 credits”, that would regularly entitle them to a benefit. These were lost earnings until the 2005 totalization agreement allowed time earned in the Japanese system to be included in order to calculate the 40 credits.

Similarly, Americans working in Japan can participate in the Japanese system, and use other years they participated in US social security to arrive at the currently required 25 years to receive a benefit from Japan.

As regular readers of me know, I have been on the fact that the Japanese tend NOT to make sure that Americans are enrolled in the proper pension in Japan, and are all too eager to rebate the up-to-36 months contributions for any American who does. Taking the rebate is the sucker’s move, because you leave half the benefit back in Japan. (You are only getting your portion of the monies contributed on your behalf, even when it comes to National Pension, since the government fronts 50% of the cost.)

I keep telling people not to take the bait, but it’s mostly like I’m talking out of my ass, so to speak. Annuity math is hard, and few people really understand what’s going on until it’s too late for them to do anything about it.

It would be one thing if we were sending $10 million to Japan, and they, in turn, were assuring pensions of a certain amount for our people. But that’s not what’s going on. We’re committing to a multimillion dollar stream of income, and the Japanese are soliciting voluntary rebates of annuity premiums to our people.

This doesn’t even go to the number of people who are only offered the National Pension program in Japan, when the Employees’ Pension system is available.

When is the State Department going to do more than make this whole pension fairness issue more than a one-liner in the country report?