Understanding the 厚生年金: A Comprehensive Overview of Japan’s Employees’ Pension System

Introduction The 厚生年金 (Kōsei Nenkin), or Employees’ Pension Insurance, is a fundamental component of Japan’s social security framework, designed to provide financial stability for workers post-retirement. This report aims to explore the structure, benefits, and implications of the Kōsei Nenkin system, elucidating its role within the broader context of Japan’s pension landscape. The purpose of this overview is to provide clarity on the mechanisms of the Kōsei Nenkin, its significance for employees and employers, and the challenges faced in maintaining its sustainability in the face of demographic shifts and economic pressures.

Structure of the Kōsei Nenkin System The Kōsei Nenkin system was established in 1954 and is administered by the Japan Pension Service. It serves employees of companies who are registered under the system and is obligatory for those earning above a certain threshold. The system is primarily funded through contributions made by both employers and employees, where the contribution rate is set as a percentage of