Japan approves law raising retirement age to 70
By Charles Chau
The move is part of an effort to address the country’s falling birthrate and an ageing population, and the consequent labour shortage and rising cost of pensions.
Read also New GPIF Board Head Says Fund Isn’t Distorting Japan Stocks
The bills give companies five options for retaining older workers:
Raising the retirement age.
Abolishing the retirement age.
Allowing employees to work beyond the age limit.
Outsourcing work to retirees as freelancers.
Supporting employees who move on to work for non-profits and other entities that provide a public benefit.
The new law requires both companies and employees to reach a consensus on the chosen option.
Read also India. PFRDA revises Investment Management Fees to be charged by pension funds in NPS – Check details
However, the Labour Standards Act is not applicable to contract workers and those who work for non-profit organisations, where some workers may not be eligible for unemployment benefits. As such, companies with a majority of unionised workers must have the union’s consent to exercise the last two options, according to NHK.
Read also Population aging and comparative advantage
The new set of laws would effectively raise the retirement age from 65 to 70. The government is also planning to reduce benefits for workers aged 60 to 64. The Cabinet, though, is not considering raising the starting age for those due to receive their pensions, reported UPI.
Read more @HR Masia
1,192 views
