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Toyota will increase the maximum retirement age to 70; Aims to retain expertise and reduce burden on the factory floor


Yomiuri Shimbun file photo
Toyota Motor Corp.

Toyota Motor Corp. will increase the age limit for retirement in the carmaker’s new reemployment scheme to 70 from August for employees in all job categories, it has been learnt.

The new redeployment system will apply to workers aged 65 or over with advanced knowledge and skills.

The automaker is looking to leverage the high level of expertise and know-how of senior employees in the organization as pressure increases on the factory floor in response to electrification and the development of automated driving technology, sources said.

As the labor shortage continues, efforts to expand employment opportunities for seniors are expanding.

Toyota’s retirement age is 60 and the company has a reemployment system that allows employees up to age 65 to be rehired.

Currently, the automaker does not have a rehiring program for people age 65 and older, although it is exceptionally rehiring about 20 people.

From August, Toyota will expand the new redeployment program to all job categories.

The company will allow employees with high levels of expertise and advanced skills, and who the workplace wants them to continue to do, to work until age 70, they said.

Toyota said wages and other benefits will be determined on a case-by-case basis by the current reemployment system.

Toyota’s multi-pronged strategy to develop a wide range of vehicles, from gasoline vehicles to electric vehicles and fuel cell vehicles, has increased pressure on its development and production sites.

Faced with a series of irregularities in model certification and quality problems at its group companies, Toyota concluded that it was necessary to increase opportunities for senior employees to play an active role in nurturing the human resources that drive the will form the basis of its activities and pass on their skills, the sources said.

The company will also improve wages and working conditions for reemployed workers between the ages of 60 and 65.

Under Toyota’s current redeployment system, wages are cut by half, except in cases where they continue to work as department managers, for example. As a result, about 20% of workers retire at age 60, they say.

Toyota plans to revise the system as early as October to allow more flexibility in setting pay based on each employee’s contribution level and other factors.

As labor shortages persist, a growing number of companies are extending the retirement age or abolishing the mandatory pension system entirely, and improving compensation for relocated workers as part of efforts to encourage different types of human resources to play an active role.

YKK Corp. has abolished the mandatory retirement age at its operating companies nationwide in 2021.

Mazda Motor Corp. also gradually extends the retirement age from 60 to 65 years, starting in the 2022 financial year.

The Law on the Stabilization of Employment for the Older Persons, which aims to increase the number of older workers, obliges companies to guarantee employment until the age of 65.

The revised law, which came into effect in 2021, also requires companies to make efforts to provide employment until people reach 70.

According to a study by the Ministry of Internal Affairs and Communications, the labor force participation rate of 65-69 year olds in 2023 was 52%, 13.3 percentage points higher than ten years ago.

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