Honda to Raise Retirement Age to 65

Honda Motor Co. says it will raise its worker retirement age from 60 to 65 when its next fiscal year begins on April 1. The move is intended to offset the effect of Japan’s rapidly aging population and growing shortage of younger workers.

The plan would affect about 40,000 people currently employed by Honda group companies. Another element of the scheme is a new employee compensation plan that will widen the difference in pay and benefits for high and low performers, Bloomberg News reports.

Honda also will offer child care support, nursing care and a partial work-from-home plan that could help coax more women into the workforce. All three options are rare among large Japanese companies.

The average retirement age for Japan’s large companies is 60, according to the country’s labor ministry. Bloomberg notes the country’s population is aging at a pace that leads the developed world. It says Honda’s plan is among the country’s most aggressive in attempting to deal with a dwindling workforce.