Overview of Pension Benefit Payment Service

The Pension Fund Association provides pension benefits when (1) the Association takes over pension resources for midway seceders from employees' pension funds or defined benefit corporate pension plans, or (2) when dissolved fund members of employees' pension funds acquire pension rights to old-age welfare pensions and when dissolved fund members or terminated plan members, etc. of defined benefit corporate pension plans offer to transfer residual assets (dividends) to the Association.

Midway seceders are members (individuals) who have lost membership rights of employees' pension funds or defined benefit corporate pension plans due to their resignation during the term prescribed by individual funds or because their employers decided to withdraw from these plans (see Note). As midway seceders are ineligible to receive pension benefits from corporate pension plans they belonged to, in order for midway seceders to receive pension benefits in the future, resources for pension benefits must be transferred either to the Pension Fund Association or to the newly joined corporate pension plans (if the newly joined plans are employees' pension funds or defined benefit corporate pension plans, the transfer of such resources is allowed only if the contract terms provide for the takeover of pension benefit payments). The Pension Fund Association takes over pension benefits for midway seceders and serves as the aggregation center for midway seceders of multiple corporate pension plans.

Dissolved fund members are those who were obligated to provide pension benefits when employees' pension funds were dissolved. As employees' pension funds subrogate payments of old-age welfare pensions for the state, the Association provides the subrogated pension benefits when dissolved fund members acquire pension rights to old-age welfare pension benefits.
Terminated plan members, etc. of defined benefit corporate pension plans are those who were obligated to provide pension benefits or lump-sum payments when defined benefit corporate pension plans were terminated. The Association provides pension benefits (portable corporate pension benefits) when residual assets are to be distributed to terminated plan members, etc. and the relevant dividends were offered for transfer to the Association. (The same applies to dividends of residual assets for dissolved fund members of employees' pension funds.)

(1) Basic Pension

Basic pensions are lifelong pension benefits provided to midway seceders taken over from employees' pension funds, including the subrogated portion of old-age welfare pensions from the state. Amounts of pension benefits are calculated on the basis of contract terms of employees' pension funds to which midway seceders formerly belonged.

(2) Subrogated Pension

Subrogated pensions are pension benefits provided to dissolved fund members of employees' pension funds when they acquire pension rights to old-age welfare pensions from the state. Benefit amounts are equivalent to amounts of old-age welfare pensions from the state for the period during which dissolved fund members belonged to employees' pension funds that were later dissolved (the portion of the earnings-related component excluding reappraisal and indexation).

(3) Portable Corporate Pension

Portable corporate pensions are lifelong pension benefits with guaranteed periods when midway seceders from employees' pension funds or defined benefit corporate pension plans offer to transfer lump-sum withdrawal payments they receive when they lose membership rights to the Pension Fund Association, or when dissolved fund members of employees' pension funds or terminated plan members, etc. of defined benefit corporate pension plans offer to transfer dividends of residual assets to the Pension Fund Association.

(4) Lump-Sum Death Benefit

Lump-sum death benefits are lump-sum payments provided to the bereaved families of beneficiaries of portable corporate pensions deceased before the start of benefits payments or before the lapse of the guaranteed period (up to 80 years old).

(5) Alternative Lump-Sum Benefit

Alternative Lump-Sum Benefit are lump-sum benefits to be paid when beneficiaries of portable corporate pensions offer to choose them at the time of requests for the choice of pension types or after the start of pension benefits payments (before the lapse of the guaranteed period).