7-1-18 Onoedori Chuo-ku, Kobe-city 651-0088 Japan TEL 078-336-6922 FAX 078-330-3166

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FAQ and Information

FAQ

Benefits

What kind of benefits can I receive?

Please refer to "Benefits of Our Fund".

I heard there are 3 ways to receive pension benefits.

There are 3 types. Please refer to "To Receive Pension Benefits" for details.

I want to receive pension benefits and the lump-sum payout combined.

Please refer to "Benefits of Our Fund".

Procedure

I am retiring. What are the procedures I should follow?

Please refer to the in-house intranet. Please also ask the HR person-in-charge of your department for details.

Interest

Will any interest be accrued during the period waiting for the start of receiving pension benefits?

Yes. Please refer to the balance statement you will receive from Our fund every year.

Taxes

How will the lump-sum payout be taxed

If you receive a lump-sum payout from the corporate pension fund upon retirement, it is subject to tax as "retirement income" in the same way as retirement benefits. The income tax is collected at the source. At the time of taxation, you are eligible for a retirement income exemption depending on the number of years of service. Additionally, taxes for retirement income are calculated separately from other income (separate taxation at source), so you are not required to file an income tax return.

How will pension benefits be taxed

The pension you receive from the corporate pension fund or government is subject to tax as "miscellaneous tax" in terms of the taxation law. The income tax is collected at the source each time a pension payment is made. At the time of taxation, you are eligible for a "public pension etc., deduction" for pension benefits from Our fund in the same way as the national pension.

Pension Payments

I received a "Current Status Notifications Form".

Our fund sends the form prior your birth month every year. Please fill in the required items and submit the form prior the end of your birth month. Please note that the pension payments will be stopped if this form is not submitted.

I am receiving pension benefits now, but I want to receive the outstanding amount as a lump-sum payout.

Please submit "Request Form (Claim Form for Partial / All Lump-Sum Payment for those in a Waiting Period : Form 7)."

I will be 60 soon. What are the procedures I should follow?

Please submit the "Claim for Annuity" along with your certificate of residence, etc. We will send the documents to you when your birthday approaches.

I am moving overseas. Can I receive the pension?

Yes. Please be sure to submit the "Change of Address Form".

I am a foreigner living overseas. What is the procedure I should follow?

Please submit the "Claim for Annuity", which will be sent to you from our Fund, along with public documents (such as a copy of your passport) with proof of your date of birth.

I live overseas. Can you transfer the benefits to banks overseas?

We can transfer to the oversea banks with SWIFT code.

I was going to receive pension benefits when I reach 60, but I want a part of it as a lump-sum payout before then.

Please submit a "Request Form".

Various Changes

I changed my name.

Please submit a "Change of Name Form".

I changed my address.

Please submit a "Change of Address Form".

I changed my bank account for receiving my pension.

Please submit a "Change of bank details" (Form 9)..

Someone who has been receiving pension payments or waiting for the start of receiving pension payments was a deceased eligible beneficiary.

Please contact us as quickly as possible.

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Public Pension

○We are members of 3 different pension systems

The members of P&G Group Corporate Pension Fund are also members of the national pension systems. One is the "national pension" under which everyone between the ages 20 and 60 living in Japan are members, and the other is the "employees' pension insurance", which is for employees who work in private companies. Therefore, the members of P&G Group Corporate Pension Fund are members of 3 pension systems.

■National pension

Everyone between the ages 20 and 60 living in Japan join the national pension. In principle, those who have been the members for more than 25 years are eligible for receiving "basic pension for the elderly" from the age of 65. The members of the national pension can be divided into 3 types depending on their profession, etc.

  • First insured person: Individual proprietors, freelance professionals, students, etc.
  • Second insured person: Company employees, civil officials, etc.
  • Third insured person: Dependent spouses of company employees, civil officials, etc.

■Employees' pension insurance

Company employees, who work for private companies also join employees' pension insurance as well as the national pension. Those who are eligible for the basic pension for the elderly can receive the "basic pension for the elderly" from the age of 65 if he/she has been a member for more than 1 month. Also, depending on the date of birth, they may be eligible for "special payments of the basic pension for the elderly" even before the age of 65 if they have been members for more than 1year.

○Framework of joining the pension systems

→ Please refer to Japan Pension Service website for details of the national pension system (national pension / employees' pension insurance).

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Pension and Tax

○Taxes on retirement pension

■Taxes on retirement pension paid to domestic residents

The retirement pension paid to residents in Japan by Our fund is subject to tax as "miscellaneous income for public pensions" and a fixed 7.5% income tax is imposed.(* During the period of Jan 1, 2013 to Dec 31, 2037, a special income tax for disaster rehabilitation (2.1%) has been added.) However, various income deductions including the deduction for public pension are applicable, so you can settle by filing an income tax return.

■Taxes for retirement pension paid to overseas residents

All of the retirement pension payments for people living overseas (non-domestic residence) are subject to collection at the source. Additionally, with some countries under the bilateral tax agreement, taxation in Japan will be exempt if you submit a notification.

○Taxes for the retirement lump-sum payout

■Taxes for the retirement lump-sum payout paid to domestic residents

A lump-sum payment at resignation/retirement is subject to taxation as "retirement income," and income tax and inhabitant taxes are withheld at source. When these taxes are levied, the "deduction for retirement income" is applicable according to the number of years of service. The amount of tax on retirement income is computed separately from the tax on other kinds of income. Those who submitted a "Declaration of Retirement Income Receipt" at the time of a lump-sum retirement benefit payment do not need to file a final return in principle. If this form has not been submitted, however, a 20% withholding tax is collected. (* During the period of Jan 1, 2013 to Dec 31, 2037, a special income tax for disaster rehabilitation (2.1%) has been added.)

●How to compute income tax and inhabitant taxes●

★"Income tax"=Amount of retirement income (1) ×Tax rate (2)-Amount of deduction (3)

○Amount of retirement income (1) =(Amount of retirement benefit payment-Amount of retirement income deduction computed below*1) ×1/2
※ Any fractional amount less than one thousand yen is rounded down.

Years of serviceAmount of the deduction for retirement income*1
20 years or lessYears of service × \400,000
More than 20 years(Years of service - 20 years) × \700,000 + \8,000,0000

○Tax rates (2) and amounts of deduction (3)

Amount of retirement income (1)Tax rate (2)Amount of deduction (3)
\1,950,000 or less5%
Over JPY1,950,000 but not more than JPY3,300,00010%JPY97,500
Over JPY3,300,000 but not more than JPY6,950,00020%JPY427,500
Over JPY6,950,000 but not more than JPY9,000,00023%JPY636,000
Over JPY9,000,000 but not more than JPY18,000,00033%JPY1,536,000
Over JPY18,000,000 but not more than JPY40,000,00040%JPY2,796,000
Over JPY40,000,00045%JPY4,796,000

★"Inhabitant taxes" (divided into two categories: a municipal inhabitant tax and a prefectural inhabitant tax)

Prefectural and municipal inhabitant taxes are levied by the prefectures and the municipalities of your place of residence as of January 1 of the year of your resignation/retirement.
The tax amount is computed by multiplying the amount of retirement income ① by the applicable tax rates (a municipal inhabitant tax of 6% and a prefectural inhabitant tax of 4%, for income earned in 2013 onwards).

○Amount of municipal inhabitant tax =
Amount of retirement income ① × 6% (rounded down to the nearest hundred yen)
○Amount of prefectural inhabitant tax =
Amount of retirement income ① × 4% (rounded down to the nearest hundred yen)

◎Calculation examples (in the case of a retirement benefit payment of JPY20,005,000 with 25 years of enrollment)

  1. Amount of retirement income deduction

    (25 years - 20 years) × JPY700,000 + JPY8,000,000 = JPY11,500,000

  2. Amount of retirement income ①

    (JPY20,005,000 - JPY11,500,000) × 1/2 = JPY4,252,500
    ⇒JPY4,252,000 (rounded down to the nearest thousand yen)

  3. Income tax (including special recovery income tax) / inhabitant taxes (municipal and prefectural inhabitant taxes)

    Income tax (including special recovery income tax): (JPY4,252,000 × 20% - JPY427,500) × 102.1% = JPY431,780
    Municipal inhabitant tax: JPY4,252,000 × 6% = JPY255,120 ⇒ JPY255,100 (rounded down to the nearest hundred yen)
    Prefectural inhabitant tax: JPY4,252,000 × 4% = JPY170,080 ⇒ JPY170,000 (rounded down to the nearest hundred yen)

Total taxes: JPY856,880

■Taxes for the retirement lump-sum payout paid to overseas residents

Overseas residents are not subject to taxation in general. However, if they worked in Japan, a 20% tax is imposed during that period and collected at the source.

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Terminology

Lump-sum payout

When a retiring employee, who has worked for 3 or more years, receives their retirement benefit in cash, this is called "lump-sum".
The payment is made only as a lump-sum payout for those who are retiring with less than 15 years of service. If you have worked for 15 or more years, however, you can choose from receiving the entire payment as monthly pension, or monthly pension and a lump-sum payout combined, or receiving in a lump-sum payout.

Number of years of service (=enrollment period)

This refers to the period from when you were employed as a full-time employee to when you retire. However, if there are any leaves of absence, these are excluded from the period. If you were employed by the company for 4 years with 5 months of leave of absence, the total number of employment years is 3 years and 7 months.

Persons with vested rights

This refers to persons who are currently receiving retirement benefits as beneficiaries of a pension as well as persons who retired with 15 or more years of service and have applied to receive retirement benefits as a pension in the future (eligible beneficiary).

Eligibility confirmation request (procedure to claim annuity / lump sum payment)

This refers to claims by persons with vested rights ( the right to receive pension payments) of the pension payments to the fund, at the age starting receipt of pension benefit (age of 60 in principle) or claim pension payments as a lump-sum payout upon retirement.

Cash Balance Plan

This is a retirement benefit system that Our fund uses. A virtual individual account is setup for each member in which the contribution amount (by the company) is accumulated and the accumulated amount together with interest is the amount of the retirement benefit.

Virtual account balance

This refers to the amount accumulated by the company every month during the period of enrollment to Our fund from the start of employment to retirement and the amount of interest applied to the accumulated amount. This shall be the amount paid upon retirement.

Defined Benefit Corporate Pension Fund

This is one of the corporate pensions. This is a different corporate body from the parent organization established by the approval of the Japanese Health Minister based on the defined benefits corporate pension law, and plays an administrative and management role for pension the fund.

Benefits of the fund are designed based on the company's retirement benefit system, aiming to make the retirement lives of the employees as comfortable as possible. The pension fund shall survive the company's bankruptcy.

Employees' pension fund

This has been the core system for Japan's corporate pension plan since its foundation in 1966. This is a special corporate body established with approval of the Japanese Health and Labor Ministry. While acting as a part of employees' pension insurance, it adds company's own pension payments in order to provide more advantageous pension benefits /lump-sum payouts compared to only joining the employees' pension insurance.

As the financial burden increases due to the stagnation in the recent fund management environment, the cancellation of the fund management on behalf of the government (dissolution of funds) has become possible since 2002.
Our fund also shifted from employees' pension fund to defined benefit corporate pension fund as of July 1 of 2007.

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