Japan's Retirement Age Plan to be Axed

The Yomiuri Shimbun

February 29, 2012

Japan


Japanese senior citizens exercising at an elderly club in Yokohama. The government will shelve its plan to extend the compulsory retirement age for national government employees from 60 to 65.
 

The government will shelve its plan to extend the compulsory retirement age for national government employees from 60 to 65, according to sources.

Instead, it plans increase the number of employees working until the age of 65 by rehiring workers who retired at 60 at wages lower than preretirement levels.

Extending the retirement age would mean maintaining salaries at the same high levels and inevitably increase labor costs. The government plans to expand the reemployment system from fiscal 2013, when the eligibility age for mutual pension payments will begin to be raised to 65 in stages.

The retirement age for national government employees is 60. However, the eligibility age for mutual pension payments for all employees will become 65 by fiscal 2025. For this reason, the government had to secure jobs and incomes for national government officials affected by the change.

The National Personnel Authority submitted the following recommendations concerning the retirement scheme for national government workers to the Cabinet and the Diet last September:

The retirement age of national government employees should be gradually extended to 65 with the rise in the eligibility age of mutual pension payments.

The wage standard for workers over 60 should be 70 per cent of wages earned before 60.