On the Japanese retirement lump sum: loyalty no longer welcomed

Abstract

In previous papers, I clearly showed that the annuity part of the Japanese employment pension is miserable and although the lump sum part is fairly good, most of it is spent on renovating housing. This paper shows that this vital element of the Japanese pension system is being eroded at a time when pensioners are in dire need. Also, the erosion is being done in such a way as to encourage earlier retirement and this at a time when the population is ageing fast, thus compounding the problem. It therefore behoves of all those nations that aspire to emulate Japan to think twice.

Keywords:

• Japan
• lump sum retirement
• pensions

JEL classifications:

• H30
• J14
• J33

Acknowledgements

I wish to express my appreciation for Drs Charles Yuji Horioka, Professor of Economics, Institute of Economic and Social Research, Osaka University, Akira Nishimura, Professor of Management and Cost Accounting, Faculty of Management, Beppu University, Junmin Wan, Associate Professor of Economics, Faculty of Economics, Fukuoka University and Nobuaki Yamashita, Research Fellow, School of Economics and Finance, La Trobe University, Australia. I am especially grateful to Professor Nishimura because as a long-standing friend who has worked for both national and private universities and has just abandoned his position as President of Beppu University, he has enabled me to deeply discuss with him many issues concerning both pensions and other subjects. Of course, I absolve all of them from any errors I may have committed.

Notes

1. Shigakukyosai in Japanese.

2. Zaidan hozin, shiritsudaigaku Taishokukin Zaidan in Japanese.

3. These days many private company employees are recruited as professors by universities that value practical experience.