Japanese Business Glossary

共済年金 (kyosai nenkin) is a type of pension system in Japan designed for public sector employees such as civil servants, private school teachers, and employees of certain organizations like agricultural or fishery cooperatives. This system is similar to the Employee Pension Insurance (厚生年金, Kosei Nenkin) but is tailored for those in specific public service sectors.

The Kyosai Nenkin is one of the components of the public pension system in Japan, which includes three main types: the National Pension (国民年金, Kokumin Nenkin) for all residents, the Employee Pension Insurance (厚生年金, Kosei Nenkin) for private sector employees, and the Mutual Aid Association Pension (共済年金, Kyosai Nenkin) for public sector employees.

In 2015, the Kyosai Nenkin system was integrated into the Kosei Nenkin system to streamline and unify the pension systems for better management and equity. Now, public and private sector employees contribute to and receive benefits from the same pension scheme, though historical benefits and rights accrued under the Kyosai Nenkin are preserved.

For public sector employees, their pension contributions and benefits are managed under this unified system but they still have some specific provisions and benefits that recognize their public service.

年金保険 (nenkin hoken) refers to Japan's pension insurance system. It is a social insurance program designed to provide financial support to individuals during their retirement, in case of disability, or to surviving family members after a contributor's death. The system ensures that people have a stable income once they are no longer able to work.

There are two main types of pension insurance in Japan. The first type is 国民年金 (Kokumin Nenkin), also known as the National Pension. This is the basic pension plan for all residents of Japan, including self-employed individuals, students, and part-time workers. It provides a flat-rate pension benefit upon retirement, starting from age 65. Participation is mandatory for all residents aged 20 to 59.

The second type is 厚生年金 (Kosei Nenkin), also known as Employees' Pension Insurance. This is an earnings-related pension plan for employees of companies and organizations. It provides benefits based on the employee's salary and the length of their contribution period. Employers and employees both contribute to this pension plan. In addition to the basic pension benefit, Kosei Nenkin also offers disability pensions and survivor pensions.

These pension schemes are administered by the Japan Pension Service and are crucial for ensuring financial security for individuals and families in their later years.

企業年金 (kigyo nenkin) refers to corporate pensions in Japan. These are retirement plans set up by companies to provide financial support to their employees after retirement. Corporate pensions in Japan can be categorized into two main types: Defined Benefit (DB) plans and Defined Contribution (DC) plans.

In a Defined Benefit plan, the employer guarantees a specific retirement benefit amount, which is usually based on the employee's salary and years of service. The employer is responsible for managing the investment and bearing the investment risk.

In a Defined Contribution plan, the employer and/or employee contribute a fixed amount to the pension plan, but the retirement benefit amount depends on the investment performance of those contributions. The employee bears the investment risk in this case.

Corporate pensions are an important part of the overall retirement system in Japan, complementing the public pension scheme (Kosei Nenkin) to provide financial security for retirees.

保障 (hosho) refers to security, assurance, or guarantee provided to ensure protection or fulfillment of certain conditions in Japan. This term is often used in various contexts such as insurance, legal agreements, and social security. For instance, in the context of insurance, hosho represents the coverage provided to policyholders against specific risks or losses. In legal terms, it may refer to the guarantees stipulated in contracts to ensure that all parties fulfill their obligations. Socially, hosho can pertain to government-provided welfare and social security measures that protect citizens' well-being.

遺族年金 (izoku nenkin) is a Japanese term for survivor's pension, a benefit provided to the family members of a deceased individual who was insured under Japan's public pension system. This pension aims to offer financial support to the bereaved family, typically the spouse and children, ensuring they have some level of economic stability after the loss of a primary breadwinner.

There are different types of izoku nenkin depending on the deceased's employment and insurance status, including the 遺族基礎年金 (izoku kiso nenkin) or Basic Survivor's Pension, and the 遺族厚生年金 (izoku kosei nenkin) or Employees' Survivor's Pension. Eligibility and the amount received depend on various factors, such as the deceased's contribution period to the pension system and the number of dependents. By providing this financial support, izoku nenkin helps alleviate some of the financial burdens faced by families during a difficult time, promoting social welfare and stability.

社会保険料控除 (shakai hokenryo kojo) refers to the "Social Insurance Premium Deduction" in Japan. This tax deduction allows individuals to reduce their taxable income by the amount they have paid for social insurance premiums during the year.

Social insurance premiums include contributions to various mandatory insurance programs such as health insurance, pension insurance, unemployment insurance, and long-term care insurance. These contributions are typically deducted directly from an employee's salary by their employer.

To claim the social insurance deduction, taxpayers must accurately report the total amount of social insurance premiums they have paid over the year on their tax return. This deduction helps lower their overall taxable income, thereby reducing the amount of income tax they owe. For self-employed individuals and others who pay their insurance premiums directly, proper documentation and proof of payment are required to claim this deduction.

The purpose of this deduction is to acknowledge the financial burden of social insurance contributions and provide tax relief to individuals. By allowing these deductions, the Japanese tax system ensures that taxpayers are not doubly burdened by both high insurance costs and high taxes, promoting a fairer and more equitable taxation system.