This series looks at actual problems relating to personnel management and finds solutions not described in laws, regulations or textbooks. The first part focuses on the Employees’ Pension Insurance System's special exemption for working parents .
What is special exemption for working parents?
The exemption applies to workers enrolled in the Employees’ Pension Insurance who are raising children under three. When their standardized monthly remunerations have decreased because they reduced working hours to care for children, their insurance premiums are calculated based on the decreased monthly remuneration, but the pensions they receive in the future will be calculated based on their remuneration in the month before the children were born. This rule is aimed to eliminate disadvantages for working parents. It must be noted, however, that the exemption will be applied only by request.
Tricky point 1 - When and who to provide the information
Normally, companies do not submit a report on childbirth to the Pension Office and explain about the system to the workers around the same time. Many companies get confused as to whether they should explain about the system when employees start childcare leave or when they return to work.
Another common problem is to forget to provide male employees with necessary information, even though the exemption applies to both male and female workers. Companies should be also careful when workers joined after leaving other firms, because they may not have received the information from the previous employment.
According to companies, some male workers say details about the special exemption system is not necessary, while female workers ask for the information.
Tricky point 2 Special exemption is applied by request
Special exemption is applied only when workers request. Companies cannot apply without their confirmation.
It is crucial that both companies and workers are aware of the system.
Failure examples
● A case of a large company
An enterprise with more than 1,000 employees had not given adequate explanation about the special exemption system. It is believed that many employees have missed the opportunity to take advantage of the benefit.
● Complains from workers
Some firms received complaints from employees, who said they suffered disadvantages because they did not know about the system.
If a company failed to provide workers with sufficient information, it might lose employees’ trust and face trouble later.
Summary
The special exemption system is a crucial scheme with a major impact on workers’ pension in the future. Please note that inadequate explanation or misunderstanding could result in a serious trouble.
