Japan moving closer to retirement age of 70

Japan will amend laws to guarantee its citizens work until they are 70, in an effort to address a chronic labor shortage and rising cost of pensions.

The move came after Japan's Cabinet on Tuesday approved legislation covering six new laws.

The government plans to submit the bills to the ongoing Diet session and hopes to put them into effect as early as April 2021.

According to the bills, companies in Japan are given five options including raising the retirement age, dropping it, or allowing employees to work beyond the age limit. The two other options are for companies to outsource some operations to retirees who start their own business or become freelancers, or to assign them to philanthropic efforts.

In the future, the government will make it obligatory for firms to let employees work until 70, Kyodo News reported. At present, Japanese companies are duty-bound to let their employees work until 65.

"There are various methods in Japan to keep people employed after they reached the retirement age of 65. Although their salaries may fall, there has been an unexpected increase in the number of Japanese who wants to work after 65," said Shuya Nomura, a professor at Chuo University in Tokyo.

"I think the most important issue in Japan is how to create an environment where all generations can work. We must all share our wisdom into this," Nomura added.

According to data from 2018 provided by the Internal Affairs and Communications Ministry, workers in Japan aged 65 or older numbered 8.62 million, or 12 percent of the 66.64 million work force aged 15 or older on payrolls.

An estimate by Chuo University and Persol Research and Consulting showed that Japan is expected to face a shortage of 6.44 million workers in 2030.