Life after 55: Japan easing forced retirement

For many Japanese workers, retirement is a troubling switch from more than full-time work to inactivity. After 30-odd years of total dedication to the same company -- Japan has a system of lifetime employment with the same one -- their existence suddenly seems empty and meaningless.

Increasingly, however, Japanese companies are finding that the current mandatory retirement age of 55 no longer makes sense. There is the waste of talent in dispensing with people who have acquired considerable know-how and still retain a strong drive to work.

But there are more practical reasons that this country can no longer afford the luxury of retirement in midlife: One of the world's longest life expectancies and lowest birthrates have contributed in a remarkably short space of time to the graying of Japan.

At present, the over-65s make up 8.9 percent of the population. By early in the 21st century that figure will be nearer 20 percent.

Japan is said to be aging three or four times as fast as the West. Official statistics show that at present eight Japanese workers support one aged person; within 30 years that will shrink to a ration of 3.3:1.

Faced with a growing shortage of young workers, the Labor Ministry wants to see a new standard retirement age of 60 firmly established by 1985. The steel industry and private railway companies began a phased move toward this target in 1979, and government officials believe that almost half the nation's corporations will have followed suit within three or four years.

In fact, the trend was launched much earlier. Matsushita Electric, the electronics giant with global production (National Panasonic, Technics), extended the mandatory retirement age to 60 as long ago as 1972.

Now, the Osaka-based company is moving on to a flexible schedule that will allow those among its 63,000 employees in Japan still retaining a strong desire to work to stay on until 65.

"Compared with previous generations, senior workers now are more physically and mentally capable . . . so it made eminent sense to us to scrap mandatory retirement at 55," explains Shohei Yamamoto, the company's managing director in charge of personnel affairs.

In 1979, the company formed a committee to study a new "life working plan" with five representatives each from management and labor. They were faced with a situation in which, under the existing system, 120 workers would be retiring in 1980, but by 1990 this would rise to 340, and by 1995 to 680.

Meanwhile, a prolonged business recession during the mid to late 1970s forced Matsushita to cut back heavily on the recruitment of staff newly graduated from high school or university. It reached a low of 150 in 1976, but climbed back up to 850 in 1980.

The management, however, believes that even if the company can gain the upper hand in the increasingly cut-throat corporate battle for the shrinking number of young graduates, business conditions from now on militate against any rapid expansion of recruitment.

The answer, therefore, is to make better use of the existing human materials -- especially when an estimated 37 percent of the work force will be over 50 by the end of the century.

In late 1980 the Matsushita committee produced a three- course flexible working plan to go into effect in fiscal 1981 (beginning April), closely watched by other corporations with similar aging problems.

According to Mr. Yamamoto, every worker will now be asked to decide his future at the age of 55. A guidance center will be established within the personnel section to offer advice.

Those who want to launch a new career outside the company (perhaps starting their own small business) will be able to retire at 55. If necessary, Matsushita will allow them six months' paid leave before retirement for study or training purposes.

"We set 55 as the cutoff for this considering that at 60 a worker is perhaps not physically or mentally able to absorb new knowledge," the personnel managing director explains.

In certain circumstances -- depending on the job category and the worker's special qualifications -- the option to stay on to 65 will be permitted. Details are still to be worked out, but it is envisaged that some flexibility in working hours will be permitted, including the possibility of part-time work.

A third option calls for the worker to officially retire at 55, and then be rehired by a subsidiary "Matsushita family company."

The first of these, National Engineering Service, was being formed in January to maintain and repair the tens of thousands of complex machines on Matsushita ass embly lines.