Shionogi & Co., Ltd. has effectively abolished mandatory retirement and finalized a policy to introduce a new system from fiscal 2027 under which employees can continue working without an age limit if they wish, while maintaining their salary level through age 65. The move is reportedly linked to efforts to adopt a job-grade system.
From fiscal 2027, Shionogi & Co., Ltd. will raise its mandatory retirement age to 65 and introduce a system allowing employees to continue working as regular employees beyond 65 without an age limit, at “the same salary level as before.” Continuation will generally be reviewed once a year, and employees are reportedly expected to be able to continue working without a pay cut even beyond the ages of 70 or 80.
The key aspect of the system is that compensation will be based on a job-grade framework rather than the conventional age-based criteria. Under the framework, pay and other employment terms will be determined according to duties and performance regardless of age. The stated aim is to facilitate alignment with a diverse workforce.
According to expert commentary, the substance of the change lies in “eliminating uniform age-based restrictions,” and it could potentially transform Japan’s HR systems as a whole. The commentary also states that compensation based on duties and performance will become important, in addition to the need to make use of older workers.