Toyota to Raise Maximum Retirement Age to 70; Aims to Retain Expertise, Reduce Burden on Factory Floor

Yomiuri Shimbun file photo
Toyota Motor Corp.

Toyota Motor Corp. will raise the age limit for retirement in the automaker’s new reemployment system to 70 for workers in all job categories from August, it has been learned.

The new reemployment system will apply to workers aged 65 or older 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 the burden on the factory floor increases 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 spreading.

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

Currently, the automaker does not have a rehiring program for those 65 and older, although it does reemploy about 20 people on an exceptional basis.

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

The company will allow employees with high-level expertise and advanced skills, and whose workplaces want them to continue, to work until the age of 70, they said.

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

Toyota’s multi-pathway strategy of developing a wide range of vehicles, from gasoline-powered to electric and fuel cell vehicles, has increased the burden on development and production sites.

Faced with a series of irregularities in the certification of models 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 will form the foundation of its business and pass on their skills, according to the sources.

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

Under Toyota’s current reemployment system, wages are reduced by half, except in cases such as when they continue to work as department managers. As a result, about 20% of the employees retire at the age of 60, they said.

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

As labor shortages persist, a growing number of companies are extending retirement age or eliminating the mandatory retirement system entirely as well as improving compensation for reemployed workers as part of efforts to encourage various types of human resources to play active roles.

YKK Corp. eliminated its mandatory retirement age at its operating companies across the nation in 2021.

Mazda Motor Corp. also is gradually extending its retirement age from 60 to 65 starting in fiscal 2022.

The Stabilization of Employment of Elderly Persons Law, which aims to increase the number of elderly workers, requires companies to guarantee employment until the age of 65.

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

According to a study by the Internal Affairs and Communications Ministry, the employment rate for those aged 65-69 was 52% in 2023, 13.3 percentage points higher than 10 years ago.