Foreign residents pay into the Japanese pension like everyone else, but many leave long before reaching the ten years needed for a pension. The lump-sum withdrawal payment returns part of what they paid. To claim, a person must not be a Japanese national, must have paid contributions for at least six months, must not qualify for a Japanese pension, must have left Japan and no longer have an address there, and must claim within two years of their coverage ending.
The amount depends on the number of months paid, up to a cap of 60 months, or five years, for anyone with contributions from April 2021 onwards. For the employees' pension it is based on average pay and roughly equals the employee's own share of contributions; for the National Pension it is a fixed multiple of the premium. Income tax of 20.42% is withheld from the employees' pension portion, which can be partly recovered by filing a return through a tax agent.
The 2025 pension reform raises the cap to eight years, and stops people claiming while they hold a valid re-entry permit, so that someone who intends to return is not refunded. Both changes take effect on dates to be set by cabinet order, which had not been fixed at the time of writing.
What it means for a foreign employer
- Tell leavers about it. Departing foreign staff often do not know they can claim, or miss the two-year deadline.
- Claiming wipes the record. Once paid, the refunded months no longer count toward any Japanese pension or towards totalisation with the home country. For people from countries with an agreement, keeping the record may be worth more.
- It is a modest consideration in package design. For a short assignment from a country with no totalisation agreement, the refund recovers only part of the double cost.
- Watch the re-entry rule. Once in force, staff who leave on a re-entry permit with plans to return will have to wait before claiming.
Sources
- Employees' Pension Insurance Act, supplementary provisions, Article 29; National Pension Act, supplementary provisions, Article 9-3-2.
- Japan Pension Service, guidance on the lump-sum withdrawal payment and the April 2021 increase in the cap.
- Act Partially Amending the National Pension Act and Related Acts, enacted June 2025.