- April 15, 2024
- Posted by: legaleseblogger
- Category: Related News
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**Understanding the Impact of Foreign Pensions on U.S. Benefits**
Mostly posting because I found it interesting, but it applies to our situation (both my wife and I have credits in both the US and Japan) so it raises a question for us about voluntary Nenkin payments.
**Decoding the SSA Information**
From this SSA page:
**Exploring the Totalization Agreement**
Beginning January 1995, a foreign pension that is based on a Totalization agreement with the United States will not cause the WEP to apply in the computation of a non-Totalization U.S. benefit.
**Navigating Foreign Pension Eligibility**
A foreign pension is “based on a Totalization agreement with the United States” if entitlement to the pension is established as a result of the Totalization agreement between the United States and that country. A foreign pension is not based on the agreement if the beneficiary met the normal entitlement requirements of the other country’s laws and did not rely on the agreement to establish entitlement. The decision as to whether the foreign pension is based on the agreement is made as of the first month the beneficiary is concurrently entitled to the foreign pension and a U.S. benefit.
**Considering the Windfall Elimination Provision**
If I’m reading this correctly, you are subject to the Windfall Elimination Provision if you fully qualify for Japanese pension without needing the Totalization agreement, but if you’re short, the Japanese pension doesn’t fall under the WEP.
**Unpacking Nenkin Contribution Requirements**
My understanding is that now only 10 years of contributions are needed to qualify for Nenkin, but this other SSA page (updated in at least 2022) seems to suggest that 25 years are still needed to fully qualify.
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For our situation, we lived in the US, then moved to Japan, and now we’re moving back to the US again. I’ve paid into the Japanese system for 8 years so I’m “safe” but my wife is over the 10 year threshold (because she has credits from her first job out of university before she moved to the US the first time) so we’re up in the air about her making voluntary pension payments if the eventual payout is going to be hit by the WEP.
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In this complex scenario, utilizing the AI Legalese Decoder can provide expert advice and guidance on the implications of voluntary Nenkin payments for your wife’s situation. By decoding the legal jargon and analyzing the specific details of your case, the AI tool can offer tailored recommendations to help you make informed decisions regarding your international pension benefits.
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****** just grabbed a
That second SSA page you cite, while admirably detailed, isn’t necessarily current. You should check first with [the Japan Pension Service](https://www.nenkin.go.jp/international/japanese-system/nationalpension/nationalpension.html) for the most recent information regarding Japanese pension requirements and benefits. The requirement to qualify for Japanese public-pension benefits [was lowered](https://www.nenkin.go.jp/oshirase/topics/2017/20170801.html) from 25 years to 10 years on August 1, 2017 (survivors’ benefits are another matter).
The first SSA page you cite isn’t exactly a model of clarity, is it. I’m not sure how relevant the information on that page is to WEP in your own situation, but as far as your wife’s voluntary pension contributions from overseas go, she would by definition be contributing to the National (Basic) Pension (*kokumin nenkin*). The SSA [has stated](https://secure.ssa.gov/poms.nsf/lnx/0201701320) that “foreign pensions that are based entirely on non-work-related criteria are not subject to WEP,” and further explains on [another page](https://secure.ssa.gov/poms.nsf/lnx/0200307290) that “payments made under Japan’s National Pension (JNP) are based on residency and not subject to WEP.” Despite the “residency” provision, I’d therefore say that your wife has no reason to worry about WEP affecting any voluntary payments she makes into the Basic Pension (obligatory caution: I’m no Social Security expert).
Note, however, that immediately after saying payments made under JNP aren’t subject to WEP, the SSA page also says “the Employee’s Pension Insurance (EPI) is based on earnings and subject to WEP,” so if either of you have paid into *kōsei nenkin* (which appears to be the case), you may want to dig a little deeper into things.