Honda plans to lift retirement age in Japan

Retirement age raised to 65 as labour force shrinks
By Reuters
||Last Updated: 12/02/2015

TOKYO (Reuters) - Honda Motor Co plans toraise the retirement age for employees at its Japan operationsto 65 years from the current 60 years in a bid to retain workersfor longer as the labour force shrinks.

Japan's third largest automaker said on Tuesday that underthe planned change, employees working beyond 60 years of agewould earn around 80 per cent of their base pay at the currentretirement age. They would also be eligible for childcare andelderly care.

Currently, Honda re-hires employees aged above 60 on shortterm contracts and pays them 50 per cent of their previous basesalary.

Honda said it planned to implement the new system by March2017, pending approval from the union.

Japanese companies are retooling their labour systems as thecountry's population is projected to fall around by around athird to 87 million in 2060, the National Institute ofPopulation and Social Security Research says, as the death rateoutpaces the birthrate.

Japan's working-age population peaked in the mid-1990s andhas been falling ever since, data from the internal affairsministry shows. Projections show the labour force could shrinkto 44 million in 2060, which is half of its peak.

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