(Japanese) National Pension: Can they legally FORCE you to enroll?

[NorthByNorthwest]

My understanding was that they could not legally force you into enrolling in the National Pension ( 国民年金; kokumin nenkin). They could coerce, cajole or fool you into enrolling - but if you knew what you were doing, you could legally avoid enrolling into it.

However, a friend claims that with some of the recent changes such as the old Social Insurance Agency (SIA) being rolled into the new Japan Pension Agency, the legal obligation to enroll has been strengthened similar to that of the legal obligation to pay one's taxes. He did not provide any laws or information for reference.

Of course, I can see plenty of references which indicate that "all registered residents of Japan, both Japanese and foreign, are required to enroll in the national pension system" - however, my understanding is that it holds the same amount of (legal) water as the Broadcast Law that states "Any person who has installed receiving equipment capable of receiving the broadcasting provided by NHK shall conclude a contract with NHK with regard to the reception of its broadcasting. " In other words, unenforceable.

Any legal eagles out there who might be able to clarify my concerns?

The way I see it, I have no financial incentive to enroll in such a program. Better to put the equivalent amount of dues into my own investments.

[KansaiBen]

M
The way I see it, I have no financial incentive to enroll in such a program. Better to put the equivalent amount of dues into my own investments.

I have not paid premiums for pension for the last two years. You are supposed to be enrolled in Kokumin Hoken Nenkin, which includes Health Insurance and Pension but the pension part they do not enforce payment. If you retire after 25 years you just get pension based on what you have paid in and the rest is considered "kara-kikan" or a gap in your payments.

[NorthByNorthwest]

I should have mentioned that I am enrolled in National Health Insurance (NHI) but for some reason have been able to entirely avoid even registering for National Pension (it's a separate department in the City Hall I went to - albeit right next to the NHI desk).

[ksnasi lurker]

I have not paid premiums for pension for the last two years. You are supposed to be enrolled in Kokumin Hoken Nenkin, which includes Health Insurance and Pension but the pension part they do not enforce payment. If you retire after 25 years you just get pension based on what you have paid in and the rest is considered "kara-kikan" or a gap in your payments.

No quite right, KB. Kara kiran's about allowing you the time you spent in your home country to 'count' towards your length of stay. Even if you've only paid in for one or two years, you'll still get your money back - and more - as long as you live to the age of around 77... As far as I can see, the NPS is a great deal - it's a guaranteed investment, and there aren't many of them around these days.

OP, you said: "The way I see it, I have no financial incentive to enroll in such a program. Better to put the equivalent amount of dues into my own investments." But see my comment above. You reckon you can make your own investment which guarantees (rock solid, no doubt) that you'll make money every day after you reach the age of 77, and go on doing so for every day of your life thereafter?

I don't know why everyone thinks the NPS is a bad deal. It's an absolutely superb deal - as long as you think you'll live until your late 70s. Then your making a 'profit' for every day of your life...

[ksnasi lurker]

And, while I'm here, I don't get this imported idea about things not being "legally enforceable." Pay NHK. Pay Pension. Pay all the rest of it. It's your duty. If you don't, we'll go the same way as Europe and the US and everything'll be enforced. Just do your duty, think of others and perhaps - just perhaps - this country will stay as the unique example of the kind of society that attracted many of us here in the first place.....

Just a thought.....

[KansaiBen]

OP, you said: "The way I see it, I have no financial incentive to enroll in such a program. Better to put the equivalent amount of dues into my own investments." But see my comment above. You reckon you can make your own investment which guarantees (rock solid, no doubt) that you'll make money every day after you reach the age of 77, and go on doing so for every day of your life thereafter?

Also tell me one investment these days where people are actually making money. Most have been ripped off by the banks, fleeced by mutual fund companies and most mortgages etc are underwater. As long as you plan on being here 25 years its probably a good a place as sticking it under the mattress. I dont really trust the japanese government to come through when its time to retire though.

[ksnasi lurker]

Also tell me one investment these days where people are actually making money. Most have been ripped off by the banks, fleeced by mutual fund companies and most mortgages etc are underwater. As long as you plan on being here 25 years its probably a good a place as sticking it under the mattress. I dont really trust the japanese government to come through when its time to retire though.

If you get PR, it doesn't matter how long you've been here. This "25 year" thing's a red herring. One year, two years, nine years, whatever... A PR will get their money back - and more besides - if they live until 77-ish.

The only investments where you'll make money are the state-backed ones. I might not trust the Japanese government 100%, but I trust them more than a private company - and that's the point.

[HarryHurry]

No quite right, KB. Kara kiran's about allowing you the time you spent in your home country to 'count' towards your length of stay. Even if you've only paid in for one or two years, you'll still get your money back - and more - as long as you live to the age of around 77... As far as I can see, the NPS is a great deal - it's a guaranteed investment, and there aren't many of them around these days.

OP, you said: "The way I see it, I have no financial incentive to enroll in such a program. Better to put the equivalent amount of dues into my own investments." But see my comment above. You reckon you can make your own investment which guarantees (rock solid, no doubt) that you'll make money every day after you reach the age of 77, and go on doing so for every day of your life thereafter?

I don't know why everyone thinks the NPS is a bad deal. It's an absolutely superb deal - as long as you think you'll live until your late 70s. Then your making a 'profit' for every day of your life...

You missed the part about it depends on your age when enrolliing. Might be fine if you're in your 20s or 30s with years to go, but not much good to us oldies almost at the end, now, is it...?

[HarryHurry]

And, while I'm here, I don't get this imported idea about things not being "legally enforceable." Pay NHK. Pay Pension. Pay all the rest of it. It's your duty. If you don't, we'll go the same way as Europe and the US and everything'll be enforced. Just do your duty, think of others and perhaps - just perhaps - this country will stay as the unique example of the kind of society that attracted many of us here in the first place.....

Just a thought.....

Yeah, right, and I'll pay NHK when I hear the other half of the J population who ignore NHK have paid up....

Have you been smokin' this evening...??

[ksnasi lurker]

You missed the part about it depends on your age when enrolliing. Might be fine if you're in your 20s or 30s with years to go, but not much good to us oldies almost at the end, now, is it...?

Opposite's true, actually. If you're in your 20s or 30s there's arguably a case for investing privately since this will allow your money the chance to grow. If you're closer to retirement you need safer investments. It doesn't matter how old you are when you join - you can get the 25 years from residency in another country. So you could join at, say, 55, pay in for 10 years and still get a good return on retirement (albeit a proportionately reduced amount, but still 'profitable' from the age of 77-is - a bit higher for women...)

[ksnasi lurker]

Yeah, right, and I'll pay NHK when I hear the other half of the J population who ignore NHK have paid up....

Have you been smokin' this evening...??

About 80% pay, actually. It's not a question of whether you watch it or not, it's a question of how a state-funded broadcaster gets its money. If too many people don't pay then the government will either reduce funding and we end up with commercials or increase tax.

[KansaiBen]

About 80% pay, actually. It's not a question of whether you watch it or not, it's a question of how a state-funded broadcaster gets its money. If too many people don't pay then the government will either reduce funding and we end up with commercials or increase tax.

The NHK got mired in a rather tawdry scandal this year over the hiring of its chief executive. Things werent done by the board and their was a lot of egg on faces and the boss had to fall on his sword over it.

[HarryHurry]

Opposite's true, actually. If you're in your 20s or 30s there's arguably a case for investing privately since this will allow your money the chance to grow. If you're closer to retirement you need safer investments. It doesn't matter how old you are when you join - you can get the 25 years from residency in another country. So you could join at, say, 55, pay in for 10 years and still get a good return on retirement (albeit a proportionately reduced amount, but still 'profitable' from the age of 77-is - a bit higher for women...)

Ok, but what about someone around age 60 who already has pension back home, has never paid J pension, then suddenly is forced to make contributions. Do you think they'll see a sound return.

But in any case, isn't their an age limit beyond which you're not required to participate?

[HarryHurry]

About 80% pay, actually. It's not a question of whether you watch it or not, it's a question of how a state-funded broadcaster gets its money. If too many people don't pay then the government will either reduce funding and we end up with commercials or increase tax.

But do you think NHK actually makes anything worth watching enough to want to pay for??

[Plats]

Why is the state involved in the TV business? Let’s remove taxpayer support for NHK, make payment optional, and let nature take its course. While we’re at it, make the pension scheme optional, too.

[ksnasi lurker]

Ok, but what about someone around age 60 who already has pension back home, has never paid J pension, then suddenly is forced to make contributions. Do you think they'll see a sound return.

But in any case, isn't their an age limit beyond which you're not required to participate?

I think the limit's 65 (could be 60, though - please check). But, even if you pay in for five years - from 60 to 65 - you'll still get a good return as long as you live until you're 77-ish. Of course, it'll be quite a small pension for only five years' payments, but still a good - but equally small - return. I agree with you to an extent if your question is "Is it worth bothering for such a small amount?" - especially if you have good alternative arrangements from another country.

You can delay taking your pension. If you wait until 70, for example, you'll get a bigger monthly payment - but you still stop paying at 60/65.

[ksnasi lurker]

But do you think NHK actually makes anything worth watching enough to want to pay for??

It's not exactly the BBC, I'll give you that... Their news coverage - especially in times of crisis - is quite good.

[ksnasi lurker]

Why is the state involved in the TV business? Let’s remove taxpayer support for NHK, make payment optional, and let nature take its course. While we’re at it, make the pension scheme optional, too.

If we adopt your idea, we'll end up like Amercia where everything's commercial and biased. The concept of a publically funded, independent station is fundamental to the concept of impartial, balanced public service broadcasting.

And letting "nature take its course" would mean that NKH would be indistinguishable from all the other banal, low quality rubbish that we get (i.e. pointless game shows, made on shoestring budgets with a small number of so-called celebrities circulating around them, repeats of alledgedly amusing clips from around the world and 60 minutes of TV containing up to 20 minutes of commercials).

[Plats]

I think the limit's 65 (could be 60, though - please check). But, even if you pay in for five years - from 60 to 65 - you'll still get a good return as long as you live until you're 77-ish. Of course, it'll be quite a small pension for only five years' payments, but still a good - but equally small - return. I agree with you to an extent if your question is "Is it worth bothering for such a small amount?" - especially if you have good alternative arrangements from another country.

You can delay taking your pension. If you wait until 70, for example, you'll get a bigger monthly payment - but you still stop paying at 60/65.

Good luck trying to claim a benefit after five years of contributions when there is a 25 year requirement.

[Plats]

If we adopt your idea, we'll end up like Amercia where everything's commercial and biased. The concept of a publically funded, independent station is fundamental to the concept of impartial, balanced public service broadcasting.

And letting "nature take its course" would mean that NKH would be indistinguishable from all the other banal, low quality rubbish that we get (i.e. pointless game shows, made on shoestring budgets with a small number of so-called celebrities circulating around them, repeats of alledgedly amusing clips from around the world and 60 minutes of TV containing up to 20 minutes of commercials).

"Public service broadcast"? Yes, America has it. Ironically it's called PBS. Anyway, since it's so great making it optional would be no problem since everyone will gladly pay for it.

[ksnasi lurker]

Good luck trying to claim a benefit after five years of contributions when there is a 25 year requirement.

If you have PR, there is no requirement to pay in for 25 years. See above about kara kiran. This is the major point which everyone seems to miss. You get a pro-rata pension based on your actual years of contributions, but the 25-year rule is waived.

[ksnasi lurker]

"Public service broadcast"? Yes, America has it. Ironically it's called PBS. Anyway, since it's so great making it optional would be no problem since everyone will gladly pay for it.

PBS is more like a charity. That's not the same as publically funded broadcasting.

I didn't say NHK was great, I said it was better than the commercial channels.

Anyway, nothing will change - we can probably both agree on that!!

[ksnasi lurker]

If you have PR, there is no requirement to pay in for 25 years. See above about kara kiran. This is the major point which everyone seems to miss. You get a pro-rata pension based on your actual years of contributions, but the 25-year rule is waived.

Here's the link: http://www.sia.go.jp/infom/pamph/dl/english01.pdf

And the important part: "If you become a naturalized Japanese citizen or if you are admitted as permanent resident before you become 65 year old, your overseas residence period between April 1, 1961 and the previous day you become Japanese citizen, within your age between 20 - 59, will be considered as “complementary period”. The complementary period is the valid period to be included to see if you satisfy the 25-year period requirement to be entitled to the Old-age Basic Pension,
but is not considered in benefit amount calculation."

[Teacher101]

If you get PR, it doesn't matter how long you've been here. This "25 year" thing's a red herring. One year, two years, nine years, whatever... A PR will get their money back - and more besides - if they live until 77-ish.

The only investments where you'll make money are the state-backed ones. I might not trust the Japanese government 100%, but I trust them more than a private company - and that's the point.

This post makes me want to laugh hysterically. Do you watch the news at all? The kokumin nenkin talk now is about how the payments per month are going to go down, because there are tons of old people and not enough young people to pay for them. And this is not going to get better anytime soon.

And if you don't think Japan will find itself someday facing "austerity measures" like countries in the EU due to debt and recession, you're deluded.

These days, it makes sense to save and invest with the idea in mind that there will be no government pension left when you are retired. I won't retire for another 30+ years, a lot can change in the world in that time. Your point about trusting the government more than private business I can understand, because nothing is certain in business either. The difference however is once the government has taken the nenkin out of my paycheck, I have completely lost control of that money and can only 'hope' that I will see it again someday. If I'm managing savings and investments on my own, at least I have some form of control.

[ksnasi lurker]

This post makes me want to laugh hysterically. Do you watch the news at all? The kokumin nenkin talk now is about how the payments per month are going to go down, because there are tons of old people and not enough young people to pay for them. And this is not going to get better anytime soon.

And if you don't think Japan will find itself someday facing "austerity measures" like countries in the EU due to debt and recession, you're deluded.

These days, it makes sense to save and invest with the idea in mind that there will be no government pension left when you are retired. I won't retire for another 30+ years, a lot can change in the world in that time. Your point about trusting the government more than private business I can understand, because nothing is certain in business either. The difference however is once the government has taken the nenkin out of my paycheck, I have completely lost control of that money and can only 'hope' that I will see it again someday. If I'm managing savings and investments on my own, at least I have some form of control.

I agree that Japan will have to take austerity measures. I expect that the state retirement age and pension contribution rate will rise, coupled with a reduction in pension benefits. You're right that a lot can happen in 30 years - for better or worse.

It's also worth remembering that in the UK, for example, state pension contributions are compulsory deductions from salary (National Insurance). So I really don't understand all the fuss about the so-called 'optional' nature of the Japanese system. Just because they don't take the money from your pay automatically doesn't mean you're not required to pay it...

I used to think like you when I was your age. Actually, you're the one who's deluded because your view of the world is an ideal one.

[HarryHurry]

I think the limit's 65 (could be 60, though - please check). But, even if you pay in for five years - from 60 to 65 - you'll still get a good return as long as you live until you're 77-ish. Of course, it'll be quite a small pension for only five years' payments, but still a good - but equally small - return. I agree with you to an extent if your question is "Is it worth bothering for such a small amount?" - especially if you have good alternative arrangements from another country.

You can delay taking your pension. If you wait until 70, for example, you'll get a bigger monthly payment - but you still stop paying at 60/65.

My point was that it would seem a rip-off to require an oldie around 60 to START paying, assuming they hadn't up to now.

[scipio]

If you have PR, .

If you have just PR, you are well and truely fecked, read the latest Kyushu case, which when it goes to the Japamese supreme court, will be ruled that non-kokumin can only claim their pension entitlements and nothing else.

I have an American friend who paid into the Japanese pension scheme for 20 years and gets Y70,000 a month. He is looking forward to his winter years of comfort...... in Turkmenistan

[NorthByNorthwest]

Okay, so it is the still the case that they (the Japan Pension Agency) cannot force us into the National Pension Plan?


I am aware there are reciprocal agreement that have been made between certain countries but still not sure how that works.

And, as far as the refund that is permitted if/when I decide to leave Japan, my understanding is that it is up to only 3 years of premiums minus tax. A poor deal if one has put into ten years of premiums...

Still for those who maintain that the National Pension Plan is a sound stable deal, could you direct me to any hypothetical calculations or examples that would help me at least visualize this? Keep in mind that the current pension age is 65 but scheduled to rise to 67 next year and there is already legislation in the pipe that will raise it once again to 70. I guess that's why one poster used the age of 77 in his example. By the time, I get old enough, I suppose the pension age will be 80...

[ksnasi lurker]

If you have just PR, you are well and truely fecked, read the latest Kyushu case, which when it goes to the Japamese supreme court, will be ruled that non-kokumin can only claim their pension entitlements and nothing else.

I have an American friend who paid into the Japanese pension scheme for 20 years and gets Y70,000 a month. He is looking forward to his winter years of comfort...... in Turkmenistan

What else do you want? We're talking about pensions here.

70,000 Yen a month? Not a bad return, actually. (I was working on around 50,000). I'm not saying the National Pension's enough to live on - it isn't - but I'm saying it's a good return on your money if you live for about 12 years or more after the age of 65. Simple math...

[ksnasi lurker]

Okay, so it is the still the case that they (the Japan Pension Agency) cannot force us into the National Pension Plan?


I am aware there are reciprocal agreement that have been made between certain countries but still not sure how that works.

And, as far as the refund that is permitted if/when I decide to leave Japan, my understanding is that it is up to only 3 years of premiums minus tax. A poor deal if one has put into ten years of premiums...

Still for those who maintain that the National Pension Plan is a sound stable deal, could you direct me to any hypothetical calculations or examples that would help me at least visualize this? Keep in mind that the current pension age is 65 but scheduled to rise to 67 next year and there is already legislation in the pipe that will raise it once again to 70. I guess that's why one poster used the age of 77 in his example. By the time, I get old enough, I suppose the pension age will be 80...

Ah, now if you're going to leave Japan then, yes, you can only claim a refund of so much. That's not the point I'm making. I'm assuming you stay until retirement, in which case you can get a decent return. You need to do the math yourself: how much paid in, how much paid in pension every month, for how long etc. I doubt the age will rise to 80, but 67/68's not unrealisatic....

[ksnasi lurker]

My point was that it would seem a rip-off to require an oldie around 60 to START paying, assuming they hadn't up to now.

Not really.. Still a good return on investment, unless you think you'll die well before the age of 80.....

Point is there's not many investments around these days that are underwritten by the third largest economy in the world. (Yes, Japan's techincally bust, but then which country isn't?)

Guys - all I'm saying is that for a modest premium every month you get it all back - and more - if you stay here.....

[HarryHurry]

Not really.. Still a good return on investment, unless you think you'll die well before the age of 80.....

Point is there's not many investments around these days that are underwritten by the third largest economy in the world. (Yes, Japan's techincally bust, but then which country isn't?)

Guys - all I'm saying is that for a modest premium every month you get it all back - and more - if you stay here.....

In my example I'm saying START paying at 60 but leaving Japan at 65. Not going to be much return there if the J gov starts being pushy on that 60-year-old to start forking out.

[Ken44]

...

Guys - all I'm saying is that for a modest premium every month you get it all back - and more - if you stay here.....

Looking back it would have been in my interest to have paid a bit each month over the years.

The problem often is no one is sure of how long they will stay in Japan.

[chainbolt]

Ok, but what about someone around age 60 who already has pension back home, has never paid J pension, then suddenly is forced to make contributions. Do you think they'll see a sound return.

But in any case, isn't their an age limit beyond which you're not required to participate?

It's even worse than this. I came here 18 years ago, I will retire in 2 years, and stay in Japan. If I would have joined the Japanese pension scheme I would have contributed for 20 years, but would receive nothing at all from it, because the required minimum is 25 years, nor would I be entitled for a refund, because I will stay in Japan. That's almost fraud and under no circumstances whatsoever acceptable. In my home country you are entitled to benefits after 5 years contributing. Luckily my country has a mutual social welfare treaty with Japan. Both states recognize their pension systems as "exchangeable" and allow their nationals to stay in their home systems.

[ksnasi lurker]

It's even worse than this. I came here 18 years ago, I will retire in 2 years, and stay in Japan. If I would have joined the Japanese pension scheme I would have contributed for 20 years, but would receive nothing at all from it, because the required minimum is 25 years, nor would I be entitled for a refund, because I will stay in Japan. That's almost fraud and under no circumstances whatsoever acceptable. In my home country you are entitled to benefits after 5 years contributing. Luckily my country has a mutual social welfare treaty with Japan. Both states recognize their pension systems as "exchangeable" and allow their nationals to stay in their home systems.

Not correct if you have PR. Then you can get your Japan pension, pro-rata for the number of years you paid in. Anyway, you didn't join and it doesn't matter whether you think it's 'acceptable whatsoever' or not. Check your facts and then live with them.

[Brianlives]

Not really.. Still a good return on investment, unless you think you'll die well before the age of 80.....

Point is there's not many investments around these days that are underwritten by the third largest economy in the world. (Yes, Japan's techincally bust, but then which country isn't?)

Guys - all I'm saying is that for a modest premium every month you get it all back - and more - if you stay here.....

I agree with what you've been saying (and thank you for the numbers you provided), the NPS is a nice deal, if you stay. Not sure why some people insist on it being a scam or feeling robbed, it's all down in paper, in several languages. You can withdraw lump sums if you leave too, some time after leaving. I got a question, if you start paying when you're 41, will you start seeing the benefits when you're 66?

[chainbolt]

Not correct if you have PR. Then you can get your Japan pension, pro-rata for the number of years you paid in. Anyway, you didn't join and it doesn't matter whether you think it's 'acceptable whatsoever' or not. Check your facts and then live with them.

I don't think this is correct. I am living here for more than 20 years and have discussed this dozens of times over the years with my HR department and various ward offices:

First of all: I do have PR. Your PR status is irrelevant in regard of the national pension system. It's irrelevant in regard of your obligation to join and it is irrelevant in regard of the requirements to get a pension here. As I explained: The enrolling period to be qualified for receiving an "old age" pension is 25 years. I would not get any pension, if I retire in Japan, because my contributing time would have been 23 years, when I will retire from my company. That's the reason why I said, the contributions would be wasted. Of course I did not know this when I came here, but now I am happy that I never joined it but decided to stay in my home country's system.

Also: I don't think there is such thing like "pro rata" benefits in the Japan pension system, neither in the national pension fund, nor in the additional fund that your company is part of. Either you are entitled to an old age pension, or not, and the minimum requirement for this is an enrollment of 25 years. If you have less time contributed, like it would be the case for me, and you decide to retire in Japan, you would get nothing. This is almost fraud, I think. It has nothing to do with PR or being a foreigner, it's just a flaw in the system.

And for your information: As I explained, I belong to one of those countries that have a social security treaty with Japan. In theory I could ask to transfer my entitlement from my home country here and apply for a pension here. They would recognize the more than 40 years I have contributed, but would of course calculate the benefit based on the Japanese system. I have roughly calculated this, and the the result would be a difference (less) of around 10%, even now with the unusually high JPY value.

The problem with the Japanese system is the ROI. Due to the demographic structure of the population I think it has the lowest return on your contributions among industrialized nations, and it will even get worse over the next 30 years. The system is already now dramatically underfunded and some analysts foresee a collapse of the system, if benefits are not reduced and contributions increased.

http://www.forbes.com/sites/stephenh...tate-pensions/

People who have contributed in the system over the last 30 or 40 years, and will retire within the next 5 or 10 years are really "screwed". It it therefore highly recommended for foreigners to avoid joining it as long as possible. This is unfortunately only possible if your home country has a social security agreement with Japan. Countries are listed here:

http://www.yueisya.com/lump/lump_en01.html

[ChucklingJawa]

I'm just going to zombify this thread with a question.

How much do people pay into the pension fund each month here? My company has a system where they financially support my contributions, but seeing as I am paying a little over 25,000 yen a month, I find it hard to believe that each month a 50,000 yen contribution is being made on my behalf, with half from me and half from my employer. That seems really excessive for a pension contribution.

Also, is the amount you pay in tied to the amount you'll get back? I know that some state pensions have a fixed pension payout regardless of the contributions made.

[hml]

How much do people pay into the pension fund each month here? My company has a system where they financially support my contributions, but seeing as I am paying a little over 25,000 yen a month, I find it hard to believe that each month a 50,000 yen contribution is being made on my behalf, with half from me and half from my employer. That seems really excessive for a pension contribution.

At my last resigning, I told my employer that I would quit before I joined (what they called now mandatory) shakai hoken and nenkin. We made a workaround. Now I'm self-employed and sell my services to the same company.

Also, is the amount you pay in tied to the amount you'll get back? I know that some state pensions have a fixed pension payout regardless of the contributions made.

While inflation has not existed in Japan for some time, I'm sure you can appreciate how your monthly payment of 25,000 yen today will be worth much less 30 years from now, so yes, there's no reason you couldn't get the same amount back. I know nothing about the payout amounts however. I don't concern myself with them because I won't qualify for them.

[TJrandom]

..., is the amount you pay in tied to the amount you'll get back? ....

Yes. The amount that you get back is tied to the amount and the number of months that you paid in. It is not a flat payout system.