In recent years, the importance of “employer-sponsored defined contribution pension plans (employer-sponsored DC)” as a means of preparing for the future has grown significantly.
Among these, the legal revisions scheduled for April 2026 (Reiwa 8) are set to greatly boost employees’ asset formation.
This article clearly explains the mechanism of matching contributions and what changes the revisions will bring.
1. Basic Knowledge of Matching Contributions and Current Restrictions
Typically, companies contribute premiums to corporate DC plans. However, companies that have introduced “matching contributions” allow employees to make additional contributions from their salaries.
Benefits of Matching Contributions
- Full Income Deduction
All contributions are fully tax-deductible, offering significant tax savings. - Efficient Management
Effortless retirement savings through payroll deduction.
Current “Two Rules”
Under the current system, the amount employees can contribute is subject to the following restrictions:
- Employer contributions must not exceed employee contributions (Employee contributions ≤ Employer contributions)
- The total amount must not exceed the contribution limit (e.g., within ¥55,000 per month)
2. Revised Points Effective April 2026
Starting April 1, 2026, restrictions that previously hindered flexibility in matching contributions will be eased.
The “not exceeding the employer contribution” restriction will be abolished.
Previously, situations arose where employees thought, “Since the company only contributes 10,000 yen, I can only contribute up to 10,000 yen myself.” After the revision, this barrier will be removed.
- Revised Content
Removal of the restriction that “employee contributions must not exceed employer contributions” - Effective Date
April 1, 2026 - Revised System
Employees will be able to contribute amounts exceeding employer contributions, provided the total contribution amount remains within the statutory contribution limit.
3. Points to Note When Implementing
Even after the amendment, contributions are not unlimited.
The following points require attention.
- Company Implementation Status
Your employer must have adopted the matching contribution system. - Compliance with Contribution Limits
The combined amount from “the employee + the company” cannot exceed the contribution limit specified in the regulations (e.g., ¥55,000 per month). - Restrictions During Leave
Matching contributions cannot be made during periods when the employer contribution is ¥0, such as during childcare or nursing care leave. - Interaction with Other Plans
Caution is required if also enrolled in defined benefit corporate pension plans (DB), etc., as the limit calculation differs (e.g., the upper limit becomes ¥27,500 per month).
Summary: More Flexible Asset Building Made Possible
Following the December 2024 change to contribution limit determination methods, the 2026 removal of restrictions will create an environment where participants themselves can flexibly set their contributions according to their own life plans.
Future Steps
The specifics of the system may vary depending on your employer’s regulations. We recommend reviewing your contribution status in preparation for the upcoming changes.
