◆The total amount of assets left in corporate DC is approximately 260 billion yen!
According to a summary by the National Pension Fund Association, the pension assets of approximately 1.12 million people have been left unmanaged in the defined contribution corporate pension plan (hereafter, “corporate DC”). The number of participants has increased by 1.5 times since the end of fiscal year 2017, when public records were available, and the total amount was approximately 260 billion yen as of the end of the previous fiscal year.
◆Assets to be transferred after loss of company-type DC eligibility
If an employee retires before the age of 60 and loses eligibility for the company DC, there are two major options: (1) transfer assets to another company DC, or (2) transfer assets to iDeCo. You have two major options. If the transfer procedure is not completed within 6 months of the loss of eligibility, the assets will be automatically sold and converted into cash and transferred to the account of the National Pension Fund Association or a specific operation management institution. (so called automatic transfer).
◆Disadvantages of “automatic transfer
If automatic transfers are made, not only are fees charged to the National Pension Fund Association and the specified management institution, but also monthly management fees are charged, and it is not possible to give investment instructions for the assets or request benefits. In addition, the total period of participation will not be counted, and the start of receiving benefits may be delayed.
Corporate practitioners should remember to advise their employees about this corporate DC asset transfer, along with other retirement procedures, when they retire.
Reference
For those who are employed (or have changed jobs) or retired — the iDeCo official website
https://www.ideco-koushiki.jp/retirement/
