A growing number of companies are reviewing their mandatory retirement age as a measure to secure necessary workforce. The Labour Ministry has recently published the report on the status of senior workers’ employment, which includes the status on companies’ retirement systems and their efforts to retain workers up to age 70. This article looks into this report.
[1] Status of retirement systems
According to the survey, 32.6% of the companies set the mandatory retirement age at 65 or over or no longer have a mandatory retirement system. The percentage has increased from 30.8% a year ago. The table below shows the distribution of mandatory ages among the companies that have responded. While the percentage of firms that set the retirement age at 60 has declined, companies with the retirement age of 65 has increased.
|
Retirement age |
Percentage (the previous year) |
|
60 |
64.4% (66.4%) |
|
61-64 |
2.9% (2.7%) |
|
65 |
25.2% (23.5%) |
|
66-69 |
1.1% (1.1%) |
|
70 or over |
2.4% (2.3%) |
|
Abolished retirement age system |
3.9% (unchanged) |
By size, the ratio of small and midsized firms with mandatory retirement age of 65 was 25.7%, while that of large companies was 18.9%. Small or midsized firms in this survey refers to companies with 21 to 300 employees, and large companies are those with 301 or more employees.
[2] Status of measures to secure employment for workers beyond the age of 65
Companies are required to make efforts to secure employment for workers aged 65 or over by adopting any of the measures from 1 to 5 below. Unlike the case for workers up to 65, companies may adopt measures other than direct employment, such as outsourcing contract.
1. Raising of mandatory retirement age to 70
2. Abolishment of the mandatory retirement system
3. Introduction of a continued employment system (rehiring or extension of an employment period) up to 70
4. Introduction of continuous outsourcing contract system up to 70
5. Introduction of a system to allow workers up to 70 to engage in social contribution programs described below
Social contribution programs of the employers
Social contribution programs of organizations outsources or invested (funded) by the employers
According to the survey result, 31.9% of the companies said they already have measures to secure employment of senior workers in place. Among small and midsized companies, 32.4% have introduced such measures, up by 2.1% from the previous year, while 25.5% of large companies have taken measures, up 2.7% from a year earlier. The result indicates that a growing number of businesses, whether large or small, are making efforts to retain workers beyond the age of 65.
By the types of measures, 2.4% of the firms said they have raised the retirement age to 70, while 3.9% have abolished the mandatory retirement system altogether. Continued employment systems were adopted by 25.6% of the companies, and 0.1% of the firms have introduced measures to support workers to engage in social contribution programs.
* The numbers may not add up to 100 due to the treatment of fractions.
The survey result shows companies are stepping up efforts to retain workers at advanced ages to cope with labor shortage. Since declining birthrate is making hiring of young workers increasingly difficult, the use of senior workforce is crucial for companies to keep the business running. Please reexamine your organizations’ employment and treatment systems of elderly workers and consider effective personnel allocation.
[Reference]
The Labour Ministry, “Result of fiscal 2024 survey on the employment of elderly workers”
https://www.mhlw.go.jp/stf/newpage_46971.html
*The information is based on laws and regulations as of the date of this article.
