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Payment suspension during employment (Employees’ Pension Insurance Insured Persons, etc.)

For persons who are receiving old-age pension and are currently employed (being an Employees’ Pension Insurance Insured Persons, etc.), when the amount of their “pension + wages” exceeds a specified amount, a part of or all of the pension payment is suspended.

If a person receives old-age pensions from two or more different implementing institutions, total amount of these pensions are used for calculation about payment suspension, and the suspended amount of each pension is calculated proportionally.

Employees’ Pension Insurance Insured Persons, etc. are:

  1. General Employees’ Pension Insured Persons (Category 1 Employees’ Pension Insured Persons) or persons age 70 or older who are engaged in work covered by Category 1 Employees’ Pension Insurance
  2. National Government Employees’ Pension Insured Persons (Category 2 Employees’ Pension Insured Persons) or persons age 70 or older who are engaged in work covered by Category 2 Employees’ Pension Insurance
  3. Local Government Employees’ Pension Insured Persons (Category 3 Employees’ Pension Insured Persons)or persons age 70 or older who are engaged in work covered by Category 3 Employees’ Pension Insurance
  4. PMAC Employees’ Pension Insured Persons (Category 4 Employees’ Pension Insured Persons) or private school personnel age 70 or older
  5. Diet members or local government council members

Details of calculation for payment suspension

If an Employees’ Pension Insured Person is currently employed, when the total of his/her pension (Basic Monthly Amount) and wages (Total Monthly Earnings) exceeds the specified amount, the payment is suspended. Basic Monthly Amount and Total Monthly Earnings calculation methods and specified amounts are as follows:

Basic Monthly Amount(pension)

The amount (monthly amount) resulting from deducting the Additional Pension amount, Occupation-related Portion and Transitional additions for occupational pension from the annual pension benefits and then dividing it by 12.
If a person is eligible to receive old-age pension from 2 or more implementing institutions, the Basic Monthly Amount of each pension plans are totaled.

Total Monthly Earnings(wages)

The amount (monthly amount) resulting from summing the standard monthly earnings of the month where Old-age Employees’ Pension, etc. during employment is calculated and the standard bonus amount of that month plus the preceding 11 months, and then dividing it by 12.

specified amounts (as of fiscal 2021; they vary according to the revision of the future pension benefit amounts)

  1. Younger than age 65 ··· 280,000 yen
  2. Age 65 or older ··· 470,000 yen
  3. The amount of suspended payment is calculated by the following calculation methond using this base amount.

Method to calculate the amount of suspended payment

1. Younger than age 65

There are no suspension due to employment when the sum of wages and pension are within 280,000 yen.
a. When Total Monthly Earnings are 470,000 yen or less and the Basic Monthly Amount is 280,000 yen or less
   Amount of suspended payment (monthly amount) = { (Basic Monthly Amount +Total Monthly Earnings) - 280,000 yen} × 1/2
b. When the Total Monthly Earnings 470,000 yen or less and the Basic Monthly Amount exceeds 280,000 yen
   Amount of suspended payment (monthly amount) = wages × 1/2
c. When the Total Monthly Earnings exceed 470,000 yen and the Basic Monthly Amount is 280,000 yen or less
   Amount of suspended payment (monthly amount) = { (470,000 yen + pension) - 280,000} × 1/2 + (Total Monthly Earnings - 470,000 yen)
d. When the Total Monthly Earnings exceed 470,000 yen and the Basic Monthly Amount exceeds 280,000 yen
   Amount of suspended payment (monthly amount) = 470,000 yen × 1/2 + Total Monthly Earnings - 470,000 yen

2. Age 65 or older

There are no suspension due to employment when the sum of wages and pension are within 470,000 yen.
a. Amount of suspended payment (monthly amount) = { (Basic Monthly Amount + Total Monthly Earnings) - 470,000 yen} × 1/2

  • Occupation-related portion in Retirement Mutual Aid Pension, and Transitional additions for occupational pension (Retirement Mutual Aid Pension) are suspended only when employed by a private school.
  • Additional Pension amount are given only to those who are receiving basic monthly amount.
  • Suspension due to employment are not applied to Transitional Addition and additional amount for deferred pension payment.

Easing measures in consideration of the consolidation

After the consolidation, since the payment suspension during employment has changed and become stricter, there are easing measures for payment suspension if a person was eligible to receive pension benefits before the consolidation and continued to be engaged in the same work at the time of the consolidation enforcement date.

There are two types of easing measures: (1) The maximum reduction is 10% of total income (total of pensions and earnings) excluding an amount of suspended payment by the calculation method before the consolidation is deducted, (2) The reduction is applied to amounts exceeding 350,000 yen of the total income of (1).

If the sum of the lower amount of (1) and (2) (for age 65 or older, amount of (1)), added to the amount of suspended payment by the calculation method before the consolidation (amount of suspended payment with special provision before adjustment) if that amount is lower than the regular amount of suspended payment by the calculation method after the consolidation,the lower amount becomes the actual amount of suspended payment.

Regular amount of suspended payment calculation vs. calculation when easing measures are applied

<Example> When a person younger than age 65 who was employed by a private company is now employed by a private school

<Example>

Pension(basic monthly amount)      150,000yen+25,000yen 175,000 yen
Basic monthly payment amount of Old‐age Employees’ Pension
(monthly payment amount of earning‐related portion)
150,000 yen
Basic monthly payment amount of Retirement Mutual Aid Pension
(monthly payment amount of earning‐related portion)
25,000 yen
Wage(equivalent of total monthly earnings)
200,000yen+1,200,000yen×1/12
300,000 yen
monthly standard salary 200,000 yen
Total of standard bonuses for the 12 months up to and including that month 1,200,000 yen
Amount of suspended payment with special provision before adjustment(monthly)
Amount of suspended payment using the formula before the consolidation
Retirement Mutual Aid Pension
(25,000yen+300,000yen-280,000yen×1/2
22,500 yen
Old-age Employees’ Pension
(Employees’ Pension before the consolidation does not have suspension Due to applying for other systems.)
0 yen

Calculation of amount of suspended payment in and after October 2015

(A) Amount of suspended payment with easing measure(1)(monthly)
(Pension + Wage-Amount of suspended payment with special provision before adjustment)×10% +Amount of suspended payment with special provision before adjustment
(175,000yen+300,000yen-22,500yen)×1/10+22,500yen = 67,750yen

(B) Amount of suspended payment with easing measure(2)(monthly)
(Pension + Wage-Amount of suspended payment with special provision before adjustment)-350,000yen +Amount of suspended payment with special provision before adjustment
175,000yen+300,000yen-22,500yen-350,000yen+22,500yen=125,000yen

(C) Regular amount of suspended payment without easing measure (monthly)
(Pension+Wage-280,000yen)×1/2
(175,000yen+300,000yen-280,000yen)×1/2=97,500yen

The lawest amount of (A) (B) (C) is applied for the amount of suspended payment.
Amount of suspended payment = (A) 67,750 yen (monthly)
Divide proportionally the amount of suspended payment by the ratio of basic monthly amount.

  • Amount of suspended payment of Retirement Mutual Aid Pension(annual):

    67,750 yen × 12 months × 25,000 yen / 175,000 yen = 116,143 yen
    Note:
    Other than this, Payments for Occupation-related Portion will be suspended due to employment by private schools.

  • Amount of suspended payment of Old-age Employees' Pension(annual):

    67,750 yen × 12 months × 150,000 yen / 175,000 yen = 696,857 yen

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