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Retirement Planning > Retirement Investing

Honda lifts retirement age as Japan Inc. copes with aging

By Kiyotaka Matsuda

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(Bloomberg) — Honda Motor Co. plans to shake up job terms next fiscal year and lift its retirement age by five years to 65, making the carmaker one of Japan Inc.’s biggest companies to take action in coping with the nation’s aging demographics.

Other proposed changes applying to about 40,000 employees at Honda and five of its group companies include a shift to child care and nursing allowances, rather than family allowances, spokesman Ben Nakamura said Monday. Honda also plans to introduce a work-from-home and partial-workday system, and adopt a salary and bonus structure that widens the pay gap between higher and lower performers.

The moves could position Honda as one of the Japan’s most aggressive companies seeking programs and policies to help deal with a population that is aging at the fastest pace in the developed world. More flexible work arrangements also may contribute to Prime Minister Shinzo Abe’s initiatives to boost the proportion of women in the workplace.

“Tapping into and mobilizing existing talent is imperative if we are to address the demographic time bomb that Japan is facing,” Marc Burrage, a Tokyo-based managing director at recruiter Hays Plc, said in an e-mail. “We are very encouraged to hear that one of Japan’s preeminent companies has taken action.”

Retirement age systems are almost universal in Japan. For about 91 percent of companies with at least 1,000 workers, the retirement age is 60, according to a labor ministry survey this year.

Working from home and support for employees with children also are exceptional. Beverage maker Kirin Holdings Co. two years ago began to allow one day to work from home per week, Nikkan Kogyo newspaper reported at the time. Sony Corp. also allows leave for child-rearing and nursing care, a program that 195 employees used in the 2014 fiscal year.

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