Winter Newsletter (No.23) as of


Increase in Mandatory
Retirement Age

Due to an aging work force and an effort to curb the growing pension payments, a law was enacted in 2006 to delay the age for making pension payments. Regardless of the company size and/or whether the company maintains employee work rules, employers are required to adopt one of the measures below:

1. Raise the current retirement age to 65 (from 60)
2. Maintain a retirement age under 65, however implementing a policy to allow continued employment (or rehire) those who want to work beyond their retirement age.
3. Abolish the mandatory retirement age.

In September 2012, a new law was introduced which will abolish the second measure above. If your preference is keep your retirement age below 65, the company must enter into a labor-management agreement by March 31, 2013. It is important that an appropriate retirement policy is in place as soon as possible.

The Labor Offices and Public Employment Security Offices shall provide guidance to companies that do not implement a policy. A formal warning will be issued or even worse, the company’s name could be made public if the appropriate policies are not put into place.

If you would like more information or would like us to assist you in this process, please approach your in-charge as soon as possible.

New Reporting on Stock Options and Other Share-Based Compensation (Reminder)

As explained in last April’s newsletter, from the 2012 calendar year, a new information return will be required for Japanese branches and domestic subsidiaries with 50% or more of their capital owned by foreign parents. When local directors or employees exercise their rights based on stock options or similar share-based compensation schemes, a special information return should be submitted to the national tax offices by March 31 of the following year. The return must be accompanied by individual statement for each individual and by each share-based compensation contract.


For those who would like us to complete such procedures, please notify your in-charge so we can provide you with a questionnaire.