CONTRIBUTIONS / FINANCING
Choosing the right solution
The Hitachi Group Pension Fund ensures that benefits are reliably financed through employee contributions, employer contributions and the interest income generated by a prudent investment strategy. As an employee, you have a choice of different contribution models to suit your current life situation.
Members have the option of increasing their retirement benefits through voluntary, personal buy-ins into the Pension Fund. In this way, they can cover pension shortfalls that may arise, for example, due to a break in employment, salary increases or divorce payments. As a rule, voluntary buy-ins can be deducted from taxable income on the tax return, resulting in tax savings. The insurance certificate shows the potential provisional buy-in amount. Before the first payment is made, members must complete the buy-in form and submit it to the administrative office. The office will calculate the definitive maximum possible buy-in amount on request.
After an early withdrawal for home ownership, no further personal buy-ins can be made into the Pension Fund until the early withdrawal has been repaid in full.
A three-year lock-up period applies to lump-sum withdrawals after a personal buy-in. In accordance with the legal provisions, benefits resulting from buy-ins cannot be withdrawn in the form of lump-sum capital within this period (retirement capital, early withdrawal for home ownership, cash payment due to emigration or commencement of self-employment). The same applies to buy-ins or lump-sum withdrawals from other employee benefits institutions, e.g. supplementary insurance plan. The tax authorities consider all pension arrangements together.
We recommend that members thoroughly investigate the deductibility and effects of buy-ins and, if necessary, seek clarification from the competent tax authority. In all cases, members bear the tax consequences of their buy-ins and any lump-sum withdrawals themselves. The Hitachi Group Pension Fund accepts no liability for any objections raised by the tax authorities.
Members can choose between three contributions tables: Standard, Standard plus and Standard minus. The contributions tables specify the amount of the contributions as a percentage of the insured salary, based on age.
Under the Standard plus contributions table, members voluntarily pay higher monthly contributions to increase their savings capital. This will also increase their retirement pension.
The Standard minus contributions table can be chosen for those periods in life when members can only afford or would prefer to pay lower contributions. However, lower contributions also mean a reduction in retirement benefits.
The risk contributions for the events of death and disability are the same for each contributions table. Regardless of the table members choose, the employer always pays contributions pursuant to the Standard table. Members can change contributions tables with effect from the following month and must notify the administrative office accordingly.
Where members do not state a preference, they will automatically pay contributions pursuant to the Standard table.
The contributions tables are included in the rules. A simulation tool for contributions tables is available on the online portal for members. The simulation shows how benefits change when you change table and how high monthly contributions would be in a different table.
Prefinancing early retirement
If the personal buy-in potential has been fully used up, members have the option of prefinancing their early retirement. Once again, the tax regulations apply (see section on buy-ins). Further provisions on prefinancing can be found in the rules.
Savings contribution vs. risk contribution
The savings contributions paid by the employer and the employee are credited directly to the savings account.
The risk contribution (2.7% of the insured salary) is paid in full by the employer and is used collectively to finance survivors’ and disability benefits.