Japan’s Pension “Falls.” My EPF Keeps Growing. A Foreign Employee’s Worries About Getting Her Money Out of India
On Japanese social media, a topic keeps coming up: “pensions are going down.” I looked into it. In fiscal 2026, Japan’s full basic pension is ¥70,608 a month, the fourth increase in a row. So why do people say it’s falling?
I’m a Japanese woman working in India on a local contract. I pay into Japan’s national pension voluntarily, and I’m also automatically enrolled in the EPF through my salary. Here’s how the two systems look side by side, and what keeps me up at night.
Why does Japan’s pension “fall” when it goes up?
The 2026 increase is 1.9 percent, while prices rose 3.2 percent. So the nominal amount goes up while buying power goes down. The reason is a mechanism called “macroeconomic slide,” which deliberately holds pension increases below inflation to protect the system’s finances. People say “it’s falling” because, in real terms, it is.
A Japan note: a pension that works very differently from EPF
Japan’s public pension is pay-as-you-go: today’s workers’ premiums fund today’s retirees. The EPF, by contrast, is closer to a personal savings account. Your contributions, your employer’s, and the interest accumulate under your name. Seeing both from the inside, I notice how different the two philosophies are: one is “we support each other,” and the other is “you save for yourself.”
Why I joined Japan’s pension voluntarily
Japanese citizens aged 20 to 64 living abroad can enroll in the national pension voluntarily. The premium is ¥17,920 a month in fiscal 2026 and rises to ¥18,290 in fiscal 2027.
I joined because, at my age, the payment period is nearly over, and if I didn’t pay, my future benefit would be smaller. But with all the changes, I wonder whether that was the right call. If I were thirty, I don’t think I would join.
A rough calculation: one year of premiums comes to about ¥215,000. For each year paid, the pension rises by about ¥21,000 a year after payments begin. So it takes about ten years of receiving the pension to break even. It’s a simple estimate that ignores indexation and the value of disability and survivor coverage.
The EPF side
My employer deducts EPF from my salary, and, as is usual, it contributes a matching amount. The interest rate for 2025–26 is reported to be 8.25 percent, which is higher than a bank fixed deposit. A sizable amount is deducted each month, so over time, it adds up.
Japan and India have a social security agreement that has been in force since October 2016. Under it, a local hire like me can withdraw the full EPF balance when I resign or retire, regardless of age. A Japanese expat sent by a Japanese company can usually be exempted from EPF with a certificate, and accompanying spouses aren’t enrolled at all. That’s why many of them never need an Aadhaar card.
The hurdles between me and my money
“You can withdraw it all” sounds simple. The road there is not.
1. Aadhaar. I needed one for EPF procedures. I was rejected twice and got it on the third attempt. It was a lot of paperwork for a foreigner. I’ve read that Aadhaar issued to foreign nationals today is valid only for the duration of the visa. Mine has no expiry date, so that doesn’t affect me.
2. Phone numbers and OTPs. Many Japanese local hires carry two numbers: a company-issued one and a personal one. After I resign, the company number will stop working. If EPF, my bank or Aadhaar still has that number on file, I won’t receive the OTP, and the process will stall. So I plan to switch every registration to my personal number, and set up roaming so that OTPs reach me in Japan. I’ve read that Aadhaar doesn’t support international mobile numbers, so switching to a Japanese number looks difficult.
3. Bank accounts. I’ve completed KYC, but accounts can still be frozen. Unfreezing means going to a branch with my visa and FRRO documents. If that happened after I’d gone back to Japan, I would be in real trouble. After leaving India, a savings account needs to be redesignated as an NRO account.
4. The waiting period. Under the EPF Scheme 2026, I understand that a full withdrawal after leaving a job now requires 12 months of unemployment, though up to 75 percent can be withdrawn after one month. I haven’t been able to confirm how that rule applies to a foreign national under the social security agreement. If it does apply, I’d have to complete the process long after my visa, my phone number and my account have lapsed.
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5. Tax at withdrawal. With five or more years of continuous service, the withdrawal is tax-free. With less than five years, tax at source applies above a certain amount.
6. Sending it to Japan. This is where three numbers get confused, so let me separate them.
- ₹5 lakh: the threshold above which a taxable remittance needs a Chartered Accountant’s certificate (Form 15CB, now called Form 146).
- ₹10 lakh: the threshold above which TCS of 20 percent applies on remittances under the Liberalised Remittance Scheme, for resident individuals, for purposes like gifts and investment.
- USD 1 million: the yearly limit on repatriating funds from an NRO account, after taxes are paid.
Form 15CA, now Form 145, is the remitter’s own declaration to the tax department about an outward remittance. The banks won’t send the money without it. My EPF is more than ₹10 lakh, so I’m above both rupee thresholds. Whether a CA certificate is needed depends on whether the remittance is considered taxable. Whether TCS applies depends on whether I’m treated as a resident or a non-resident when I send it. Remittances from an NRO account are outside LRS and not subject to TCS. When exactly a foreign employee stops being a “resident” for these purposes is what I haven’t been able to confirm. I don’t yet know the total in bank charges and CA fees either.
What I still don’t know
- Whether the 12-month rule applies to a foreigner under the agreement.
- Whether my registered number, Aadhaar and account will work for EPF procedures after I leave.
- Whether the transfer to Japan counts as an LRS remittance or an NRO repatriation.
- Whether I’d need a CA certificate, whether TCS applies, and what the total cost will be.
- Whether I should keep paying into Japan’s pension.
What I take from this
- Japan’s pension went up in nominal terms but fell in real terms. That’s why people say it’s falling.
- Japanese citizens abroad can join the national pension voluntarily. Break-even takes about ten years.
- EPF is a personal savings system with a higher interest rate than a bank deposit, and the social security agreement lets local hires withdraw the full balance when leaving.
- The hurdles are Aadhaar, phone numbers, bank accounts, waiting periods and the remittance itself.
- What I’d do next: check which phone number is registered everywhere. If you carry a company number and a personal number, move everything to the personal one, and set up roaming so that OTPs reach you abroad.
I’m not an accountant or a lawyer, and this is my personal experience. Please check with EPFO, your bank and a Chartered Accountant before you act.
Next time: another small slice of daily life in India, seen through Japanese eyes.
