Press release BoxID: 411530 (ECOVIS AG Steuerberatungsgesellschaft)
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Some Expatriates Feel Pension Pain in Japan
Reform of the public pension system is a top prerogative, but some foreigners in Japan are still forced to contribute twice.
(PresseBox) (Berlin , 14.03.2011) Tokyo, 14. March, 2011 – The number of participants in the public pension system in Japan has been in decline for years, leaving some 420,000 elderly people without retirement incomes. Reform is underway, but the pace is slow. The public pension system in Japan involves two separate institutions, the National Pension Insurance (NPI) for self-employed persons and the Welfare Pension Insurance (WPI) for salaried employees. At present, the NPI premium is fixed at JPY15,100 per month, the WPI premium is set at 16.058 percent of monthly standard remuneration (MSR). Half of the WPI premium is contributed by employer. To become eligible for payments, the insured person has to pay into the system for at least 25 years. In addition to WPI, employers are obliged to contribute to a health insurance, unemployment insurance and worker’s accident compensation insurance which together provide social security in Japan. Total deduction come to approximately seven percent of an employee’s total remuneration. In the case of expatriates transferring to Japan on foreign assignment, they are obliged to participate in the WPI if their salary is paid in Japan, even though they may be covered by social security in their native country. However, agreements to eliminate dual coverage have been reached with a number of countries, including Germany, the UK, Korea, the USA, Belgium, France, Canada, Australia, the Netherlands, the Czech Republic, Spain, Ireland and Italy. The Japanese Government is currently in discussions with countries such as India, Brazil, Hungary, Austria and Slovakia. In view of the fact that China intends to impose pension insurance premiums on foreign nationals working in China soon, negotiations with China are also urgently needed.
ECOVIS AG Steuerberatungsgesellschaft
Ecovis is a leading global consulting firm with its origins in Continental Europe. It has over 3,300 staff operating in 30 countries. Its consulting focus and core competencies lie in the areas of tax consultation, auditing, legal advice and accounting and management consulting services. The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in its back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments - from preparation in the client's native country to support in the target country. In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues. The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth.