On 27 October 2021, the Swedish Parliament decided to vote in favor of an agreement on social security between Sweden and Japan. The agreement was signed already in April 2019. The agreement has not yet entered into force.
The agreement focuses mainly on pensions and has been put in place to make it easier for individuals who work in both Sweden and Japan. The agreement states for example that it will be easier for Swedes working in Japan to be entitled to Japanese pension and to have that pension paid out if the person moves back to Sweden.
Furthermore, the agreement stated that employees who are sent by their employers to work temporarily in Japan, and their accompanying family members, can remain in Swedish social security for up to five years for the benefits old-age and survivors' pensions as well as sickness and activity compensation.
The agreement also contains regulations regarding calculation of insurance periods and the possibility to combine these if a person e.g. has worked in both Sweden and Japan. This will make it easier to meet any minimum threshold for e.g. income based old age pension and supplementary pension.
KPMG comment
The agreement clarifies the importance of developing the already good relationship between Japan and Sweden. We see that this is an important step to simplify for international companies that operates in both Japan and Sweden and increases the protection from a social security perspective for the employee.
As the agreement only covers part of the benefits under the Swedish social security system, it is however important to find out if e.g. detached workers remain eligible for other Swedish social security benefits, such as child allowance and parental allowance.
On the basis the agreement does not cover all benefits of the Swedish social security system, it is also recommended for employers to find out if employer social security contributions financing other benefits are due to be paid for e.g. detached workers to or from Sweden.
EU and Japan have previously entered into free trade agreement and the government as well as KPMG see this as an important point in line to meet increased trade and cooperation between companies in Sweden and Japan.
KPMG has extensive experience in assisting with issues concerning employees moving between Sweden and Japan as well as internationally. If you have questions about this or want to know how it can affect your company, you are welcome to contact us.
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The article in Swedish
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