JAPAN - The Japanese government is implementing a new law to encourage employers to increase the mandatory retirement age from 60 to 65 and to better coordinate the beginning of pension coverage with later retirement ages.
It’s an attempt by the authorities to combat the declining labour force and slowing birth rate, as well as addressing other issues associated with an ageing society.The Employment Security Act for Elder People, which mandates the changes, requires employers to either increase mandatory retirement ages from 60 to 65, to abolish the retirement age or to maintain the existing retirement age but allow some workers older than age 60 to continue working. Employers will have until 2013 to phase in the changes or face penalties.
The law will also increase the commencement age for social security pensions to 65 years. The age at which retirees can access social security payments has been increasing gradually from 60 to 65 since 2001 and will not be fully implemented until 2025. In addition, as of 2013, the commencement age for when retirees can access salary-linked pensions will be increased from age 60 to 65.
These measures are being taken in light of the baby boomer generation reaching retirement age and straining the country’s resources. A survey earlier this revealed that by the year 2020, one in every four people in Japan will be 65 years or older.
Despite the new rules many Japanese already work beyond retirement age, with about half of all men aged 65-70 continuing work.
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