Relationship between exchange rates and the lump-sum withdrawal payment.

Today, let’s discuss the relationship between the lump-sum withdrawal payment and exchange rates.

1. How much can you get for the lump-sum withdrawal payment?

Firstly, it’s important to know the estimated amount you could receive.

The amount is determined based on your “employment period” and “salary” in Japan.

The calculation is straightforward, involving multiplying a coefficient based on your average monthly salary and employment period (refer to the table below).

For example, if you had a monthly salary of 300,000 yen and worked for 36 months, the amount would be as shown in the table below.

300,000 JPY × 3.3 = 990,000 JPY

Please note that this is an estimate.

The precise amount will be stated in the decision notification and will not be known until the notification arrives.

2. What will be the final payment amount?

The payment will be converted at the TTS rate on the day of the transfer and will be directly sent in foreign currency from the pension organization.

Therefore, there will be no currency conversion fees, and in most cases, the full amount will be deposited into your account.

However, some banks require the use of intermediary banks to receive funds from overseas, and in such cases, intermediary bank fees may be deducted.

In which currency will the lump-sum withdrawal payment be made?
The payment currency depends on the recipient’s country and may vary accordingly.

AustraliaAustralian Dollar
CanadaCanadian Dollar
New ZealandNew Zealand Dollar
SingaporeSingapore Dollar
UKU.K. Pound
DenmarkDanish Krone
NorwayNorwegian Krone
SwedenSwedish Krona
SwitzerlandSwiss Franc
IranJapanese Yen (Japanese bank only)
MyanmarJapanese Yen
Europe countries other than aboveEuro
Countries other than aboveU.S. Dollar

3. Effects of exchange rates

As you may be aware, as of October 2023, there has been a continued trend of a weakening yen.

Therefore, you might consider postponing the receipt of the pension.

It is true that the pension amount is affected by the weakening yen as it is converted from yen to foreign currency.

However, the yen may weaken further in the future, and the fluctuation of exchange rates is unpredictable.

Furthermore, it takes 4-5 months from the application to the decision date for the pension.

It is difficult to determine the favorable timing as it will be converted at the TTS rate on the decision date.

There is another crucial point to consider, which is the deadline for pension applications.

If you do not apply within two years of leaving Japan, you will lose the right to receive the payment (to be precise, within two years of losing your address).

This could result in significant losses.

Thus, my conclusion is that it is better not to dwell on the impact of exchange rates.

It might be beneficial to proceed with the procedures quietly after leaving the country without too much hesitation.

I hope this information is helpful for your application.