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Major Japanese banks to let staff work until age 65+
[March 30, 2006]

Major Japanese banks to let staff work until age 65+

(Japan Economic Newswire Via Thomson Dialog NewsEdge)TOKYO, March 30_(Kyodo) _ Major banking groups including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. will introduce systems this April to allow their staff to stay on the payroll until 65, well past the mandatory retirement age of 60, banking group officials said Thursday.

After tuning 60, workers will resign but will sign a reemployment contract on an annual basis, according to the officials.

The banking industry's move is in line with legislation taking effect in April to promote such an employment practice.

Similar systems will be introduced at companies covered by the banking groups' consolidated accounting.

The new law calls for companies to let their employees work longer because the age at which retirees become eligible for pension benefits is being raised.

Although the companies are allowed to lengthen the period of workers' service in phases, the large banks will raise the maximum age of their workers to 65 immediately at the time the law takes effect.

The systems, however, will not guarantee that all employees are permitted to stay in their workplaces because they have to meet their banks' criteria for reemployment, which will look at their physical fitness and work achievements, for example, the officials said.

According to a survey by the Ministry of Health, Labor and Welfare, workers are already allowed to stay on until 65 at about 70 percent of companies across the country. Most banks, however, have had their employees leave when they have turned 60.

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