This is the takeaway from what is being commented on this weekend by the Japan Times.
In short, there are mainly two pension systems in Japan. One system, the employee’s pension insurance (kousei nenkin), piggybacks on the other, which is the national pension insurance (kokumin nenkin).
A Japanese government guideline has it, that workers who put in less than 30 hours a week in a job are not required to be enrolled in the employee’s pension insurance. (Everyone resident in Japan is required to be in the national program, the kokumin nenkin, but the government has not, to date, chased people around about that.)
Where Americans working in Japan get confused is that, since the government does not chase people around for the pension premium, they conclude that the pension is “optional”.
When I saw that the ruling party was looking to make enrollment into the employee’s pension mandatory at 20 hours (starting around 2016), it struck me that Japan was taking concrete measures to clean up its old age pension mess. This should be a concern, actually, to every taxpaying American, because when Japanese come to America, we allow them to gain partial credit in our Social Security system, even if they don’t have the 40 quarters. This is the totalization treaty that I’ve written about—probably more than anyone on the internet, in fact.
Because Japan continues to play fast and loose with its own pension system, the American taxpayer bears TWO risks. First, we must pay the Japanese who we agreed to partly cover, if they don’t have the 40 quarters. (You see this now as “40 credits”, but it is $4700 or so in social security-taxed earnings in each of ten calendar years.) Then, secondly, we cover Americans who did not participate in the Japanese system, if they show up back in America! They may be eligible for SSI, and also, they receive a bumped up payout ratio if they pay into social security late. They avoid Windfall Elimination, because they never participated in the Japanese system. It is basically a convoluted tax dodge against us.
From the time Minshuto won the election in 2009, I expected the minimum accomplishment would be a reform of the Japanese public pension system by 2013. This was in the “Manifesto”, wasn’t it? They had commercials out there, in that “Seiken Koutai!” series, where they were saying that people shouldn’t have to worry about old age.
Now, the indications are, that the government bureaucrats are screwing around with this—even as the Noda Government rightly seeks a 3% hike in the consumption tax to fund the current level of pension obligations.
The 30-hour rule particularly burns Americans, because the people who like to screw around with foreigners’ rights—including other foreigners in Japan—always seem to find a way to create some elegant bullshit reason why the employee’s pension is not required. So, when I saw about the 20 hours, I thought the people with power were finally playing it straight. But no.
Hoofin 