As one of the few expat persons in Japan who has blogged about this, I have been getting an unusual number of hits lately. This (usually) tells me that someone, somewhere in Japan has been caught up with, and/or has gotten a notice about having to enroll in the pension.
And the bottom line is: yes, you must enroll in the pension. So sign up–even if you can’t pay at the moment.
I keep telling people that, and I know sometimes my advice does not get taken. But I still give it. Because not only has the rule not changed, but the government is tightening up on enforcing the rule.
Now, if your concern is whether “you will ever see the money in the future”, I think the general answer—as far as government retirement annuities go—is yes. (Meaning, you must be around to collect the annuity.) The only exceptions are with countries that don’t yet have an American, Canadian, or Australian-style “totalzation treaty” with Japan. Remember, your time in the Japanese pension counts towards your vesting in the home country. And additionally, whatever time you have already in in your home country counts towards qualifying in Japan.
The example I gave was myself, who had been paying into U.S. sociail security from the age of 15. When I enrolled in kokumin nenkin here, I already had 23 or 24 of the years I needed to vest in the Japanese system by virtue of the treaty (even though the treaty had technically not taken affect yet). When the American one did, on October 1, 2005, those years in U.S. social security counted toward the 25 needed in Japan. I was probably one of the first people of my birth year (1965) to vest in a Japanese pension (since ordinary Japanese only start contributing at age 20).
Now, will I ever really see the money? Again, as a government retirement goes, if I reach retirement age, then, yes. (If I don’t, I’m not certain that I am going to see it as much of an issue.)
If you’ve been following the news this week, the new Kan Government is emphasizing that taxes must go up if Japan is to continue to have the kind of social welfare society that people expect. How the pension system works is like a tax: your immediate contribution goes to pay the retirement of an older person who is already retired. What you get is the promise in the future to receive your check due you.
Since the plans are totalized, your vested piece would be based on your contributions to Japan.
If your country has not totalized with Japan yet, then of course what I am saying is not much immediate help. I know England does something quite different with Japan, where you can exempt yourself for 5 years here if you continue to pay in to the English system in your home country. Even the American, Canadian, and Australian treaties have this type of carve out where people are sent to work here from their home country. (You must have the home country government certify this, though. It’s not your certification, it’s the government’s! And with Americans, it also means you agree not to use the Japanese health system at all. Don’t think you’re just going to get form USA/J-6 from Maryland and blow off the Japanese. The IRS will then want to see your social security tax on your 1040. But I digress.)
Most people only worry about pensions when it’s too late. Be thankful the Japanese are following up on you on this matter. It’s the Real Rule of the land, it’s part of the totalization treaties, and the payments in are tax-deductible. If for some reason you can’t pay, make sure you’re signed up anyhow and make arrangements. (I am sure the Japan Pension Service is doing the same thing with native Japanese.)