Saturday, December 04, 2004

A seminar

Yesterday I went to yet another seminar w/ my boss. Today's topic is U.S-Japan Totalization Agreement that is also called the Social Security Agreement. Simply said it means it is good for the individual person & bad for the company.



What's good about it? Before they made this agreement, we couldn't claim the retirement money from U.S. Governtment if we didn't pay 40 credits (a quarter = 1 credit which equal 10 years of work). However, after this agreement, we can claim even if we didn't pay 40 credits but we achieved remaining credits in Japan. But of course it's not full amount.. For example, if we paid 32 credits in US and we paid 8 credits in Japan, we will be able to get a retirement benefit for 32 of the 40 credits. That's basically how they made this agreement. So it's good for individual. No wasted work time with no benefits.. However...

What's bad aboutit? It's going to be a headache for the company. Theoretically if a person works less than 40 credits in the U.S.(minimum credit is 6.), that person can claim this money. How can a company possibly keep track of 100% the people who worked? It's hard.. Some of these people already retired or passed away in Japan. We don't know where all these people live or if they are still alive after they retired in Japan. If husband already passed away, widow/child can claim this money, too. Should the company search for these people and tell them? or should the company wait until other people tell them? If they want to get this money, the company will still prepare documents for them.

I can feel this is really a headache. Also even if the company wanted to do outsourcing to a 3rd party like their CPA firm, they can't claim on a regular basis commission by law. It's like almost voluntary work for them, too. So I know this is a part of social service for the 3rd party. But they also need to make profit, too.. So I don't think they prefer to do that either. I didn't check other company's case. So I am not sure they are ok or not. But, for my opinion, it will create big trouble eventually.