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From what I understand, 退職金 can refer to severance pay or retirement (pension, etc.).

If a company is in financial trouble and the members of the board are asked to resign and "退職金返上", does this refer to severance, pension, or both?

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退職金 is a flat amount of money you get when you retire as a thank you for your years of service and dedication to the company. It is separate from pensions and other sorts of remuneration and is basically just a hefty bonus. 年金 is the word used to refer to the pension system and, as a public service that one would have paid into over their lifetime, cannot be revoked (as far as I know, anyway).

So if you're the director of a company and you've been there a long time, you can expect a large sum upon your retirement. But if you commit some sort of wrongdoing that brings shame to the company, especially in a public way, you may be asked to leave and forfeit the 退職金. For example, I've heard of a school principal not far away from retirement who got caught driving drunk or some other such crime and faced immediate termination with revocation of 退職金.

In a way it's kind of the inverse of what we'd call severance, wherein you're fired for some reason but are entitled to some amount of money. In the Japanese system it's money you expect when you leave voluntarily but may be revoked upon termination.

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