I don’t personally know anyone in this situation but it is widely talked about. I understand this practice is more common in government offices.

It is probably related to the issue of getting re-hired as an older employee. People over 50 years of age generally have a much harder time to find new employment because the retirement age in Japan is 60. Retirement is usually mandatory.

On an interesting side-note, employees often have the option to return to work after retirement, but usually at significantly less pay. I know two people who opted to return to work after forced retirement.