In Japan, retirement plans are a topic of great importance and discussion. With an aging population, the need to ensure financial security in retirement is becoming increasingly crucial. The Japanese pension system consists of several main options, each with its own unique features and benefits.
One of the most popular retirement plans in Japan is the Employee Pension Insurance, which covers mostly employees working for companies. This mandatory pension plan provides a stable income during retirement, ensuring that individuals can maintain their standard of living even after leaving the workforce. It includes both a basic pension and an additional earnings-related pension.
Another key retirement plan in Japan is the National Pension scheme, which is available to those self-employed or not covered by the Employee Pension Insurance. It is mainly geared towards those who are not part of the traditional workforce, such as freelancers or small business owners. This option provides a basic pension amount that is determined by the number of years individuals have contributed to the system.
Additionally, there are private pension plans in Japan, which are voluntary and not linked to any specific employment. These plans are managed by private financial institutions and offer individuals the opportunity to save for retirement through contributions. Although they are not mandatory, they can be a valuable addition to the main pension options, allowing individuals to enhance their financial security in retirement.
In conclusion, retirement plans in Japan are diverse and cater to the different needs and circumstances of individuals. Whether it be the mandatory Employee Pension Insurance, the National Pension scheme, or private pension plans, the goal remains the same: to provide individuals with a secure and comfortable retirement.
Employee Pension System
The Employee Pension System is one of the main retirement plans in Japan, which is mostly offered by employers to their employees. It is a mandatory pension scheme that aims to provide financial support to individuals after they reach the retirement age.
The Employee Pension System is a defined benefit plan, which means that the amount of pension benefits is based on a formula that takes into account the employee’s years of service and average salary. The longer an employee has worked and the higher their salary, the higher their pension benefits will be.
Contributions to the Employee Pension System are made by both the employee and the employer. The employee’s portion is deducted from their salary, while the employer contributes an equal amount. These contributions are invested by the Japan Pension Service to generate returns that help sustain the pension system.
Eligibility and Benefits
To be eligible for the Employee Pension System, individuals must be between 20 and 60 years old and have worked for a certain number of years. The number of years required varies depending on the generation and can range from 10 to 25 years.
Upon reaching the retirement age, individuals can start receiving their pension benefits. The amount that they receive is determined by the formula mentioned earlier and is paid monthly. The Employee Pension System also provides disability benefits for individuals who are unable to work due to a disability.
National Pension System
The National Pension System is one of the main retirement plans in Japan. It is a mandatory pension plan that covers mostly all residents in the country. The system is designed to provide financial support to individuals during their retirement years.
The National Pension System operates on a pay-as-you-go basis, which means that the contributions made by current workers are used to fund the pension payments for current retirees. The amount of pension received by an individual depends on the total number of contribution periods and the amount of contributions made throughout their working years.
In the National Pension System, the contribution period is from the age of 20 to the age of 60, which is considered the working age range. The amount of contributions is based on the income earned by the individual during their working years. Self-employed individuals are required to pay the full amount of contributions, while employed individuals share the contributions with their employers.
Upon reaching the age of 65, individuals become eligible to receive the pension payments from the National Pension System. The pension amount is adjusted annually based on the fluctuations in the cost of living. In addition to the regular monthly pension, there are also lump-sum benefits available for those who meet certain requirements.
Qualification and Coverage
- All residents in Japan between the ages of 20 and 60 are required to participate in the National Pension System, regardless of their nationality or employment status.
- Foreign residents who have obtained the status of residence for at least 6 months are also eligible to participate in the system.
- However, there are certain exceptions and exemptions for individuals who are covered by other public pension systems or who have a certain level of income.
Benefits and Concerns
- The National Pension System provides a safety net for individuals who do not have access to other pension plans, such as employees of small businesses or self-employed individuals.
- However, there are concerns about the sustainability of the system, as the aging population and declining birth rate in Japan pose challenges to the funding of the pension payments.
- Efforts are being made to reform the National Pension System to address these concerns and ensure its long-term viability.
In conclusion, the National Pension System is one of the main retirement plans in Japan, which provides financial support to individuals during their retirement years. While it offers benefits to those who do not have access to other pension plans, there are concerns about its sustainability that need to be addressed.
Welfare Pension System
The welfare pension system is one of the main pension plans in Japan. It is a government-run program that provides financial support to individuals in retirement.
The welfare pension system in Japan is primarily aimed at providing a basic pension for individuals who do not have access to other pension plans. This includes self-employed individuals, part-time workers, and those who have not contributed enough to other pension systems.
Contributions
The welfare pension system is funded through contributions from both employees and employers. The amount of contributions depends on the individual’s income and age. Typically, employees contribute a percentage of their salary, while the employer also makes contributions on behalf of the employee.
Pension Benefits
The pension benefits provided by the welfare pension system are mostly based on the number of years of contributions. The system calculates the monthly pension payment by multiplying the number of years of contributions by a fixed amount. The longer an individual has contributed, the higher the pension payment will be.
It’s important to note that the welfare pension system provides a basic pension, and the amount of the payment may not be sufficient for a comfortable retirement. In addition, the pension benefits are subject to adjustment based on the financial situation of the system and changes in the overall population.
In conclusion, the welfare pension system in Japan is one of the main retirement plans that are available to individuals. It primarily targets those who do not have access to other pension plans. While it provides a basic pension, it may not be enough for a comfortable retirement and is subject to adjustments.
Mutual Aid Pension System
The Mutual Aid Pension System is one of the retirement plans available in Japan. It is mostly targeted towards workers in small to medium-sized companies, non-regular employees, and the self-employed who are not covered by the Employees’ Pension Insurance system.
Under this system, individuals are required to join a pension association, which is usually organized based on their occupation or industry. The pension contributions are determined based on the income earned by the individuals.
These pension associations are responsible for managing the pension funds and distributing the benefits. They provide various pension benefits, including old age pensions, disability pensions, survivor’s pensions, and lump-sum death benefits.
The Mutual Aid Pension System is designed to provide a safety net for workers who are not covered by other pension plans. It aims to ensure that individuals have a stable income in their retirement years.
However, it is important to note that the benefits provided by the Mutual Aid Pension System may not be as substantial as those offered by other pension plans in Japan. Therefore, individuals who are eligible for other plans, such as the Employees’ Pension Insurance or the National Pension, may choose to opt for those instead.
Overall, the Mutual Aid Pension System plays a vital role in Japan’s retirement plans, providing a necessary pension option for individuals who are not covered by other pension systems. It offers a basic level of financial security for workers, ensuring that they can enjoy a comfortable retirement.
Defined Benefit Plans
In Japan, defined benefit plans are one of the main types of retirement plans that offer pension benefits to employees. These plans are also commonly known as “nenkin” or pension plans, and they are regulated by the Japanese government.
Defined benefit plans in Japan provide a guaranteed monthly retirement income for employees based on a formula specified in the plan. The formula usually takes into account factors such as the employee’s salary history, length of service, and age at retirement.
These plans are mostly offered by larger companies and government organizations in Japan. The employers bear most of the investment risks and responsibilities in managing the pension funds to ensure the promised benefits are paid out to retirees.
One of the advantages of defined benefit plans is that they provide a stable and predictable retirement income for employees, regardless of market fluctuations. This can be especially beneficial for individuals who prefer a steady income stream after retirement.
Contributions and Vesting
Employees are required to contribute a portion of their salary to the pension fund, and the employer may also make contributions to the fund on behalf of the employee. The exact contribution amounts and vesting rules vary depending on the specific plan.
Typically, employees become vested in their pension benefits after a certain number of years of service, which ensures that they are entitled to receive the promised benefits upon retirement.
Government Support and Regulations
The Japanese government plays a significant role in supporting and regulating defined benefit plans. The Ministry of Health, Labor and Welfare oversees the pension system in Japan and sets the guidelines and regulations for pension plans.
Additionally, the government provides a basic pension for all Japanese citizens, called the National Pension, which serves as a foundation for retirement income. The benefits from the National Pension are usually incorporated into the overall pension benefits received from defined benefit plans.
In conclusion, defined benefit plans in Japan are mostly offered by larger companies and government organizations. They provide a guaranteed retirement income based on a formula, and the employers bear the investment risks. These plans offer stability and predictability in retirement income and are regulated by the Japanese government.
Defined Contribution Plans
Defined Contribution plans, which mostly are pension plans in Japan, are savings programs that enable individuals to contribute to their retirement funds through regular payments. These plans differ from Defined Benefit plans, where the retirement benefits are based on a predetermined formula.
Under Defined Contribution plans, employees and employers contribute a specific percentage of the employee’s salary into a retirement account. The contributions are invested in a variety of assets, such as stocks, bonds, and mutual funds. The ultimate value of the retirement account depends on the performance of these investments.
Employee Contributions
Employees are typically responsible for a portion of the contributions made to the Defined Contribution plan. The contribution amount is usually deducted automatically from the employee’s salary and is often a fixed percentage determined by the employer. These contributions are tax-deferred, meaning they are not taxed until retirement withdrawals are made.
Employer Contributions
In addition to employee contributions, employers also contribute to the Defined Contribution plan on behalf of their employees. Employer contributions may be a fixed percentage or match a certain percentage of the employee’s contributions. These employer contributions are usually subject to vesting requirements, where employees must fulfill certain criteria, such as years of service, to be eligible for receiving the full employer contribution.
It is important to note that Defined Contribution plans provide individuals with more control and flexibility over their retirement savings compared to Defined Benefit plans. Individuals can choose how much they contribute, how their contributions are invested, and when they want to start taking withdrawals after retirement.
Overall, Defined Contribution plans offer individuals the opportunity to build their retirement savings through consistent contributions and potential investment growth, making them a popular choice among individuals planning for their future financial security.
Public Pension Fund
The public pension fund is one of the main retirement plans in Japan. It is a government-sponsored pension system that provides financial support to eligible individuals during their retirement years. This pension fund is mostly funded by mandatory contributions made by employers and employees throughout their working lives.
In Japan, the public pension fund operates on a pay-as-you-go basis, which means that current workers’ contributions are used to pay for the pension benefits of current retirees. This system ensures that the pension fund remains sustainable and able to provide retirement income to future generations.
There are two main types of public pension plans in Japan, which are the Employees’ Pension Insurance (Kosei Nenkin) and the National Pension (Kokumin Nenkin). The Employees’ Pension Insurance is for employees who work for companies or organizations, while the National Pension is for self-employed individuals, farmers, and others who do not fall under the category of employees. Both plans have different contribution rates and benefit amounts.
Under the public pension fund, eligible individuals can receive a monthly pension payment after reaching the eligibility age, which is currently set at 65 years old. The pension benefit amount is determined based on factors such as the number of years of contribution, average income, and the specific plan in which the individual is enrolled.
It is important for individuals in Japan to understand the public pension fund and its various plans to ensure they are financially prepared for retirement. While the public pension fund provides a basic level of retirement income, many people also opt to supplement their pension benefits with additional private retirement savings to have a more comfortable lifestyle during their retirement years.
Occupation-specific Pension Plans
In addition to the main public pension system, there are occupation-specific pension plans available in Japan. These plans are designed for individuals who belong to specific occupations, such as government employees, teachers, or healthcare professionals.
Occupation-specific pension plans are separate from the public pension system and offer additional retirement benefits to members. They are managed by organizations or associations that are closely related to the specific occupation.
One of the main advantages of occupation-specific pension plans is that they provide more tailored benefits for individuals in particular occupations. For example, a pension plan for government employees may offer additional benefits like post-retirement healthcare coverage or early retirement options.
These occupation-specific pension plans are mostly defined benefit plans, which means that the retirement benefit amount is pre-determined based on factors like years of service and average salary. This provides more stability and predictability for individuals planning their retirement.
However, it is important to note that occupation-specific pension plans are usually only available to individuals who work in the specific occupation they are designed for. They do not generally apply to individuals working in other industries or occupations.
In summary, occupation-specific pension plans in Japan are additional retirement plans that are available to individuals in specific occupations. These plans offer tailored benefits and are mostly defined benefit plans. They provide additional retirement security and options for individuals in these occupations.
Individual Retirement Accounts
In Japan, individual retirement accounts are a popular option for retirement plans. These accounts function similarly to other retirement plans, but offer specific advantages for individuals.
Types of Individual Retirement Accounts
There are two main types of individual retirement accounts in Japan:
- NISA (Nippon Individual Savings Account): This account allows individuals to invest in various financial products, such as stocks, mutual funds, and bonds, with tax advantages. The income generated from these investments is tax-free, making it an attractive option for long-term savings.
- Defined Contribution Pension: This account is similar to a 401(k) plan in the United States. It allows individuals to contribute a portion of their salary on a pre-tax basis, and the funds are invested to grow over time. Upon retirement, individuals can withdraw the accumulated funds or convert them into an annuity for a steady stream of income.
Advantages of Individual Retirement Accounts
Individual retirement accounts offer several benefits:
- Tax Benefits: Both NISA and defined contribution pension plans offer tax advantages, allowing individuals to save more money for retirement.
- Flexibility: Individual retirement accounts provide flexibility in terms of investment options and contribution amounts, giving individuals greater control over their retirement savings.
- Long-term Savings: These accounts are designed for long-term savings, helping individuals accumulate a significant retirement nest egg over time.
Overall, individual retirement accounts are a popular choice for retirement plans in Japan, which offer tax benefits and flexibility for individuals looking to save for their future.
Voluntary Retirement Savings
In addition to the mandatory pension plans, Japan also offers voluntary retirement savings options for individuals who wish to further supplement their retirement income. While the mandatory pension plans provide a basic level of financial support, voluntary retirement savings can provide additional funds to help maintain a comfortable lifestyle in retirement.
Individual Retirement Accounts (IRAs)
One of the main options for voluntary retirement savings in Japan is the Individual Retirement Account (IRA). IRAs are personal savings accounts that individuals can contribute to on a voluntary basis. These accounts can be opened at financial institutions such as banks or insurance companies.
Contributions made to IRAs are not tax-deductible, but the growth and earnings within the account are tax-free until withdrawal. Individuals can choose to invest their savings in various assets, such as stocks, bonds, or mutual funds, depending on their risk tolerance and investment goals.
Voluntary Employee Provident Fund (VEPF)
The Voluntary Employee Provident Fund (VEPF) is another popular option for voluntary retirement savings in Japan. It is a type of defined-contribution pension plan that allows employees to contribute a portion of their salary to the fund, which is then invested and grows over time.
VEPF contributions are not tax-deductible, but the withdrawals made at retirement age are taxed at a lower rate compared to regular income. This option is mostly available to employees of participating companies that offer VEPF as part of their retirement benefits package.
| Retirement Savings Option | Tax Treatment | Available to |
|---|---|---|
| IRA | Tax-free growth and earnings, taxable withdrawal | Any individual |
| VEPF | Taxable withdrawal at a lower rate | Employees of participating companies |
Retirement Age and Pension Eligibility
In Japan, retirement plans are mostly based on the country’s pension system, which is designed to provide financial support to individuals after they reach a certain age and retire from work. The retirement age and the eligibility criteria for receiving pension benefits vary depending on the specific pension plan.
Public Pension
The public pension system in Japan has different plans for different age groups. The National Pension System is applicable to those between 20 and 59 years old, while the Employees’ Pension Insurance System covers those who are employed and aged 60 or above. To qualify for pension benefits, individuals need to have paid premiums for a certain number of years and meet the eligibility criteria set by each plan.
Private Pension
In addition to the public pension system, Japan also has private pension plans offered by companies and organizations. These plans typically have their own retirement age and eligibility requirements. Some private pension plans may have mandatory retirement ages, while others may allow individuals to retire earlier with reduced benefits. The specifics of each private pension plan vary, so it is important for individuals to review the details of their plan to understand when they can retire and receive pension benefits.
Benefits and Disbursement Options
In Japan, retirement plans are mostly comprised of various pension options that provide benefits and disbursement options to individuals nearing retirement age. These plans aim to ensure financial security and stability during the retirement years.
One of the main benefits of these pension options is the regular income they provide after retirement. This income is typically based on the individual’s years of contribution to the pension system and their average salary during their working years. The pension amount is determined by a formula that takes into account these factors, providing individuals with a steady stream of income to support their living expenses.
Another benefit of these pension plans is the potential for additional bonuses and allowances. Some plans offer bonuses based on the national economy’s performance or the specific industry in which the individual was employed. These bonuses can provide a financial boost to retirees, allowing them to enjoy a higher standard of living during their retirement years.
When it comes to disbursement options, individuals can choose between monthly annuity payments or a lump sum payment. Monthly annuity payments provide a regular income stream, similar to a salary, while a lump sum payment provides a one-time payout of the accumulated pension funds. The choice between these options depends on the individual’s financial needs and personal preferences.
It’s important to note that individuals can also opt for a combination of both options. They can receive a portion of the pension funds as a lump sum payment and the remaining amount in the form of monthly annuity payments, providing them with flexibility and the ability to cater to their specific financial situations.
Overall, the benefits and disbursement options provided by retirement plans in Japan offer retirees financial security, stability, and flexibility as they embark on their retirement journey.
Taxation of Retirement Benefits
Retirement plans in Japan are mostly structured to provide pension benefits for individuals after they have retired from their careers. These pension plans have specific tax implications that retirees need to be aware of.
The taxation of retirement benefits in Japan depends on various factors, including the type of pension plan an individual has and their overall income. In general, pension income is subject to income tax in Japan. However, the rules and regulations regarding the taxation of retirement benefits can be complex and may vary depending on individual circumstances.
One of the main pension plans in Japan is the Employees’ Pension Insurance (EPI) plan. Under this plan, both employees and employers contribute to the pension fund, which is then used to provide retirement benefits. The pension benefits received from EPI are subject to income tax in Japan.
There are also other types of pension plans available in Japan, such as the National Pension Plan and the Welfare Pension Plan. The taxation of benefits from these plans may differ from the EPI plan, and individuals should consult a tax professional or financial advisor to understand the specific tax implications.
In addition to income tax, retirees may also be subject to other taxes on their retirement benefits, such as consumption tax. The taxation of retirement benefits can be complex, and it is important for retirees to understand their tax obligations to avoid any penalties or issues with the tax authorities.
In summary, the taxation of retirement benefits in Japan is a complex topic, which is influenced by various factors. Retirees should carefully consider the type of pension plan they have and consult with a tax professional or financial advisor to ensure they are aware of their tax obligations and can plan accordingly.
Pension Reform in Japan
Pension reform in Japan has been an ongoing process aimed at ensuring the sustainability and adequacy of retirement plans in the country. The government has taken several steps to address the challenges posed by an aging population and a shrinking workforce.
Current Pension Plans in Japan
Currently, there are two main pension plans in Japan: the Employees’ Pension Insurance (kosei nenkin) and the National Pension (kokumin nenkin). These plans are designed to provide financial support to individuals in retirement, ensuring a stable income and standard of living.
The Employees’ Pension Insurance is a mandatory plan for most employees, including both Japanese nationals and foreign residents. It is based on a defined benefit system, where the pension benefit is calculated based on the individual’s salary and years of participation in the plan. This plan provides coverage for both basic and additional benefits, such as disability and survivor benefits.
The National Pension, on the other hand, is a voluntary plan for self-employed individuals and those not covered by the Employees’ Pension Insurance, such as part-time workers, freelancers, and students. It is based on a defined contribution system, where the pension benefit is determined by the individual’s contributions and the investment returns of the pension fund. This plan provides basic benefits, but additional benefits are not available.
Challenges and Reforms
Despite the existence of these pension plans, there are still challenges to be addressed. One of the main challenges is the low participation rate, especially among the self-employed and part-time workers who are not covered by the mandatory Employees’ Pension Insurance.
To tackle this issue, the government has introduced reforms to encourage more individuals to participate in the pension system. These reforms include expanding the coverage of the Employees’ Pension Insurance to include more categories of workers, improving the portability of pension benefits, and enhancing the transparency and accessibility of information about pension plans.
Furthermore, the government has also taken steps to ensure the sustainability of the pension system in Japan. This includes increasing the retirement age, implementing measures to reduce the dependency ratio, and exploring alternative sources of funding, such as raising the consumption tax.
Overall, the pension reform in Japan is an ongoing process aimed at addressing the challenges faced by retirement plans in the country. The government’s efforts to expand coverage, improve portability, and ensure the long-term sustainability of the pension system are crucial for the financial security and well-being of the population.
Challenges and Future Outlook
Retirement plans in Japan are mostly provided through the public pension system, which includes the Employees’ Pension Insurance and the National Pension. However, these pension plans face several challenges that need to be addressed to ensure a secure retirement for individuals.
1. Aging Population
One of the main challenges for pension plans in Japan is the rapidly aging population. With a declining birth rate and increasing life expectancy, the number of retirees is expected to exceed the number of workers in the future. This puts a strain on the pension system, as there will be fewer contributors and more beneficiaries. To tackle this issue, the government has implemented reforms to increase the retirement age and encourage participation in the pension system.
2. Sustainability
Another challenge is the sustainability of pension plans. The current pension system relies on a pay-as-you-go model, where current workers’ contributions fund the benefits of current retirees. However, with an aging population, this model becomes less viable. The government needs to find solutions to ensure the long-term sustainability of pension plans, such as increasing contributions, reducing benefits, or introducing new funding sources.
Furthermore, there are concerns about the adequacy of pension benefits, especially for those who have low incomes or work irregularly. To address this, the government has introduced a new pension system called the National Pension Scheme for Small Amounts, which aims to provide a minimum level of benefits for individuals with limited work history or income.
3. Changing Work Patterns
The rise of non-regular employment, such as part-time or temporary work, poses challenges for pension plans. Many non-regular workers are not covered by the standard pension system, which can lead to gaps in their retirement savings. The government is working to expand pension coverage for non-regular workers and encourage them to participate in pension plans to ensure their financial security in retirement.
In the future, the government may also need to consider adapting pension plans to accommodate the gig economy and self-employment, which are becoming increasingly popular work arrangements.
In conclusion, while the retirement plans in Japan face challenges due to the aging population, sustainability concerns, and changing work patterns, the government is taking steps to address these issues. By implementing reforms and expanding coverage, Japan aims to ensure a secure retirement for its citizens in the future.
Comparison with Other Countries
When it comes to retirement plans, Japan has a unique system in place. Unlike many other countries, which rely mostly on government-run pension schemes, Japan offers a variety of options for individuals to plan for their retirement.
One of the main differences between retirement plans in Japan and those in other countries is the emphasis on employer-sponsored pension plans. While many countries have government-run pension plans that everyone is automatically enrolled in, in Japan, these plans are typically only available to employees of larger companies. This means that self-employed individuals and those working for small businesses may need to rely on other retirement savings options.
Government-Run Pension Plans
In Japan, there are two main government-run pension plans: the National Pension and the Employees’ Pension. The National Pension is a basic pension plan that covers individuals who are not eligible for the Employees’ Pension, such as the self-employed and those working for small businesses. The Employees’ Pension, on the other hand, is available to employees of larger companies and offers more comprehensive coverage.
Private Pension Plans
In addition to government-run pension plans, Japan also offers private pension plans. These plans are generally offered by financial institutions, insurance companies, and other private entities. They provide individuals with more flexibility and control over their retirement savings, allowing them to choose their contribution amounts and investment options.
Overall, while retirement plans in Japan may differ from those in other countries, they offer individuals a range of options to plan for their future. Whether it’s through government-run pension plans or private pension plans, individuals can find a retirement savings solution that suits their needs and helps secure their financial future.
Q&A:
What are the main pension options in Japan?
The main pension options in Japan are the Employees’ Pension Insurance (EPI), the National Pension Plan (NPP), and the Mutual Aid Association (MAA).
How does the Employees’ Pension Insurance work?
The Employees’ Pension Insurance is a social insurance program for employees in Japan. It is a compulsory pension plan where both the employer and the employee contribute a certain percentage of the employee’s salary. The amount of pension benefit received upon retirement is based on the number of years the employee has contributed and the average wage during that period.
What is the National Pension Plan?
The National Pension Plan is a social insurance program for self-employed individuals, unemployed individuals, and those not covered by the Employees’ Pension Insurance. It is also a compulsory pension plan where individuals contribute a certain amount of money each month. The amount of pension benefit received upon retirement is based on the number of years the individual has contributed.
What is the Mutual Aid Association?
The Mutual Aid Association is a pension plan for employees of certain industries, such as agriculture, forestry, and fisheries, as well as public sector employees. It is managed by individual associations and allows members to receive pension benefits based on their contributions and years of service.
Can individuals choose between these pension plans?
No, individuals cannot choose between these pension plans. The Employees’ Pension Insurance is mandatory for employees, while the National Pension Plan is mandatory for self-employed individuals and others not covered by the Employees’ Pension Insurance. The Mutual Aid Association is only available to employees in specific industries or sectors.
What are the main pension options available in Japan?
The main pension options available in Japan are the National Pension System (Kokumin Nenkin), Employees’ Pension Insurance, and the Mutual Aid Pension System.