What happens to the pension of an employee returning home?

In short: a foreign employee returning home can, on certain conditions, claim the lump-sum withdrawal payment (脱退一時金) (Employees' Pension Insurance Act, Supplementary Provisions, Article 29). But there is a deadline — within two years of departure — and receiving it means the period is deemed never to have been insured. For nationals of countries whose social security agreements allow periods to be totalised, claiming removes the period from totalisation, so not claiming can be the better choice.

This page is for back-office staff of companies whose foreign employee is returning home — and for the employee. Sending employees out of Japan was covered in How overseas business trips and overseas postings differ for workers' compensation. This article runs the other way: the pension when someone leaves Japan.

Do the premiums paid come back?

Part of them can, as the lump-sum withdrawal payment. Article 29 of the Supplementary Provisions of the Employees' Pension Insurance Act allows a claim by a person meeting these tests:

Main requirements (employees' pension)	Substance
Insured period	Six months or more
Nationality	Not a Japanese national
Address	No address in Japan (i.e. claim after departure)
Deadline	Less than two years since the day the person last lost insured status (departure, in practice)
Benefit history	Never held entitlement to disability employees' pension or similar

The amount is computed from the insured period, and the months used in the computation are capped at 60 months (five years) (where the final month is April 2021 or later; per the Japan Pension Service). The national pension has a parallel mechanism in Article 9-3-2 of its Supplementary Provisions.

Why can claiming make you worse off?

The reason is written in the provision itself. Article 29, paragraph 5: once the lump-sum withdrawal payment is received, the period on which it was computed is "deemed never to have been an insured period."

This is where social security agreements come in. Some agreements allow Japanese and foreign insured periods to be totalised toward pension entitlement in each country. If a national of such a country takes the lump sum, the period disappears — and the base for totalisation with it. For someone planning to build pension entitlement at home, not claiming can be the better course.

By contrast, the Japan–China agreement only prevents double coverage; it has no totalisation. The same "return home" therefore has different best answers by country. Always check the existence and content of the agreement (whether it totalises) on the Japan Pension Service's country pages. Which way is better depends on the person's age, record and plans — this article does not decide it.

What does the company file?

The company side follows the ordinary departure framework.

• The social insurance loss notification and the employment insurance loss notification (which doubles as the foreign worker employment status notification)
• The lump-sum claim is the employee's own, but the company keeping the service and standard remuneration records in order speeds it up
• Before departure, the practical step is to hand over the pension number records and the claim form (published by the Japan Pension Service in many languages)

By when should things move?

The deadline is two years from departure — but the decision (claim or not) should be settled before departure. Gathering information from abroad afterwards is a heavy burden on the individual. Once the departure is fixed: (1) check the agreement and totalisation for the home country, (2) walk through the claim procedure if claiming, (3) the company's loss notifications — in that order.

What can 四葉社会保険労務士事務所 do?

四葉社会保険労務士事務所, in Kohinata, Bunkyo City, handles the loss procedures at departure, the employment status notification, and lays out the decision material on the lump-sum system for the employee. Consultation is free of charge. Fees are in the fee schedule; the whole flow of foreign employment is in Hire one foreign employee — how many counters do you need?; winding a company up is covered in The social and labour insurance procedures when you close a company.

Whom to consult

The lump-sum payment also raises income-tax issues (withholding and refund), which belong to a tax accountant. Residence-status procedures go to 四葉行政書士事務所 (a separate business from this office, engaged under a separate contract); matters in dispute to an attorney. No referral fees change hands.

Frequently asked questions

Q. Should we recommend the lump sum to every returning employee?
A. No — not uniformly. For nationals of countries whose agreements totalise periods, receiving it removes the period from totalisation (Supplementary Provisions, Article 29, paragraph 5). The best answer varies by country and by the individual, so the company's proper role is to explain the system and the deadline and leave the decision to the person.

Q. When does the two-year clock start?
A. Under the provision, it runs from the day the person last lost national pension insured status (or, if they still had an address in Japan on that day, from the day they first ceased to have one) — Article 29, paragraph 1, item 3. In practice it is described as "within two years of leaving Japan."

Q. What if the person returns home with less than six months of coverage?
A. The employees' pension lump sum requires six months or more of insured period, so no claim lies. If the home country's agreement totalises, even a short period can still count later — check country by country.

Q. A Chinese employee is returning home. Can periods be totalised?
A. The Japan–China agreement is for preventing double coverage and has no totalisation mechanism (per the Japan Pension Service). In that case the lump-sum claim tends to be the realistic option — but confirm the deadline (two years from departure) and the procedure before departure.

Sources for this article

• Employees' Pension Insurance Act (厚生年金保険法, Act No. 115 of 1954), Supplementary Provisions, Article 29 (the lump-sum withdrawal payment: paragraph 1 = requirements and the two-year limit; paragraphs 3 and 4 = computation; paragraph 5 = deemed never insured) — current text confirmed on e-Gov on 14 August 2026
• National Pension Act (国民年金法, Act No. 141 of 1959), Supplementary Provisions, Article 9-3-2 (the national pension lump sum) — existence confirmed on e-Gov the same day
• The 60-month cap on months used in computation (final month April 2021 or later) — Japan Pension Service, "The lump-sum withdrawal payment system" (viewed 14 August 2026)
• The absence of totalisation in the Japan–China agreement — Japan Pension Service, country page for China (viewed 14 August 2026)

This article is general information; whether claiming is advantageous depends on individual circumstances. Judgments that fit your particular circumstances are made by a qualified professional after a meeting. Written by Joji Uramatsu (Shakai Hoken Roumushi (Certified Social Insurance and Labor Consultant), Gyoseishoshi (Certified Administrative Procedures Legal Specialist), Registered Real Estate Transaction Specialist).