"No More Pay Cuts, Retirement Age Raised to 65... Entry-Level Salaries Increased: Drastic Measures by Japanese Bank"

Mitsubishi UFJ Bank to Raise Retirement Age from 60 to 65 in Japan
Abolishes Uniform Salary Cuts at 55; Fewer Employees in Their 50s Expected to Leave
Up to 7% Pay Increase for Younger Staff, Starting Salary Set at 300,000 Yen

Mitsubishi UFJ Bank exterior.

Mitsubishi UFJ Bank, Japan's largest private bank, will abolish its system of uniformly reducing salaries at age 55 starting from the 2027 fiscal year and extend the retirement age from 60 to 65. The goal is to create an environment where employees can work regardless of age and to change the existing HR practice of relying on external secondments. Instead, the starting salary for new employees will be increased by up to 7%.

According to the Yomiuri Shimbun on October 8 (local time), roughly half of Mitsubishi UFJ Bank’s employees have typically left the bank in their early 50s, often being seconded as executives to affiliated companies or business partners. Internally, this was seen as "a way out of the promotion race," while in the industry it was referred to as a "one-way ticket" (katamichi kippu). Employees who remained at the bank, except for some executives, saw their workload decrease and had to work for lower pay than before age 54.

However, under the new system, salaries will no longer be uniformly reduced after age 55, and wage increases based on performance will become possible. As a result, the number of employees in their 50s being seconded externally is expected to decrease, while more staff are likely to remain at headquarters and continue building their careers.

In the 2026 fiscal year, the bank will implement an average salary increase of more than 3%, with increases of up to 7% focused on younger employees and non-managerial staff.

In addition, the starting salary for new university graduates will be raised to 300,000 yen (approximately 2.8 million won), higher than before.

The media outlet reported, "As the generation hired during the bubble economy (late 1980s to early 1990s) continues to retire and digitalization reduces the need for simple work roles, Mitsubishi UFJ Bank’s strategy is to maintain the know-how of experienced senior staff while promoting younger employees based on ability, thereby strengthening its competitiveness in talent acquisition amid these changing conditions."