With hiring of young workers becoming increasingly difficult due to falling population, some companies are raising the mandatory retirement age to secure necessary workforce. Recently, the Ministry of Labour has released the result of 2025 survey on the status of employment of elderly workers. The report shows trends in companies’ mandatory retirement systems and their efforts to retain workers until 70. This article looks into this report.
[1] Status of mandatory retirement system
According to the survey, 34.9% of the companies set the retirement age at 65 or over, or have abolished the mandatory retirement system altogether (up from 32.6% in the previous year.) The chart below shows the retirement age distribution. The ratio of companies setting the age at 60 has declined, while the percentage of companies where workers retire at the age of 65 has increased.
|
Age category |
Ratio (previous year) |
|
60 |
62.2% (64.4%) |
|
61-34 |
2.9% (no change) |
|
65 |
27.2% (25.2%) |
|
66-69 |
1.2% (1.1%) |
|
70 or over |
2.5% (2.4%) |
|
No retirement age |
3.9% (no change) |
By company sizes, 27.7% of SMEs and 21.5% of large firms set the mandatory retirement age at 65. (The ratios in the previous year were 25.7% and 18.9%, respectively.)
*Under this survey, “SMEs” refers to companies with 21 to 300 employees, and “large firms” are companies with 301 or more employees.
[2] Measures to retain workers up to age 70
Companies are required to implement measures from 1 to 5 below as part of the effort to retain workers until the age of 70. Unlike the measures to retain workers until 65, businesses may choose to provide employment opportunities indirectly, e.g., by signing an entrustment contract.
1. Raising of the retirement age to 70
2. Abolishing of a mandatory retirement system
3. Introduction of a continued employment system until the age of 70 (reemployment, extension of employment)
* Including employment by affiliated or other companies
4. Introduction of a system to sign an entrustment contract continuously until the age of 70
5. Introduction of a system to engage workers in social contribution businesses described below continuously until the age of 70
i. Social contribution businesses undertaken by the company
ii. Social contribution businesses of other organizations entrusted or funded by the company
The survey showed that 34.8% of the companies have implemented above measures, with the percentage increased from 31.9% a year ago. By size, 35.2% of SMEs and 29.5% of large firms said they have taken these steps. By the type of measures, 2.5% of the companies said they have raised the retirement age to 70, 3.9% have abolished the retirement system altogether, 28.3% have introduced a continued employment system, and 0.1% have adopted a system involving indirect employment.
The Ministry of Labour encourages companies that have yet to implement specific measures to consider what options are possible.
[Reference]
The Ministry of Labour, “Result of the FY2025 survey on the status of employment of elderly workers”
https://www.mhlw.go.jp/stf/newpage_66853.html
