Wednesday, May 20, 2009

Contribution and Collection of Pension Money in South Korea

Here's the question:



I'm worried that my school (hagwon) isn't actually contributing to my pension. My pay stub says they are, but is there anyway that I can find out before I try to cash in?

Trevor

Valid concern. Depending on what country you're from, you're entilted to a lump-sum refund. Some teachers, however, are not covered by this. I pulled this from the National Pension Fund website which is surprisingly throrough.


Who is excluded from Coverage?

① Those nationals whose country does not mandatorily cover Korean citizens
under its pension scheme. => Under this rule, only the nationals from the
following 18 specified countries
  • ※ do not have to enroll and pay the NPS contributions.

  • ※ the Republic of South Africa, Nepal, Maldives, Myanmar,
    Bangladesh, Vietnam, Saudi Arabia, Armenia, Ethiopia, Iran, Egypt, Tonga,
    Pakistan, Fiji, Cambodia, Singapore, Belarus, East Timor

② Foreigners who are not registered under the Immigration Act, or to whom the
forced deportation order has been issued under the same Act, or who are staying
in Korea without being permitted to extend their term of stay.


③ Among the registered foreigners under the Immigration Act, those whose stay
status falls under any of the followings; culture & art, studying abroad,
industrial training, general training, religion, visiting & living together
and others.


④ People excluded from the mandatory coverage of National Pension Scheme, by
the social security agreement.


Also, check this out if you happen to be British. There is a lot of rumors surrounding what happens with citizens from the UK. Here's a another post I wrote about that.

Most schools will match your 4.5% monthly contribution into your pension fund, so each month you're actually investing 9% of your salary. It's a good system because it's essentially a forced savings plan for teachers who prefer to spend there money on booze or shoes.

The best way to find out if your boss has been matching your contribution is to either call the pension office or go down there yourself. I would recommend you go down there just to make sure. The website won't let me link individual pages, but if you click the mini-map on the home page, you'll find a very comprehensive list of telephone numbers and addresses for your area.

If you have determined that your school or boss is matching your contribution and it's time for you to leave Korea, you need to go to a regional pension office and follow these directions which I also pulled from the site.


An Application for Lump-sum Refund (This form is available at any regional
office.)


  • His/her passport

  • His/her Alien Registration Card

  • A copy of bankbook or similar (registered in the applicant's name)

  • A copy of an airline ticket. (the date of departure has to be in less than a month from the date of the claim)

  • ※ In the case that an applicant has been insured under an other public pension scheme since before July 23, 2007 and he/she had insured periods under the National Pension Scheme before being insured under the public pension scheme, he/she can receive his/her national pension contributions as a lump-sum refund if he/she submits a certificate of employment and a copy of a certificate of coverage.

If , for some reason, you needed to leave Korea in a hurry or forgot about your pension money, then you'll need to follow these directions.


An application for Lump-sum Refund (it must be notarized from a
notary's agency in the country where the applicant resides and be attested by
the Korean embassy).


  • A copy of bankbook or similar (registered in the applicant's name)

  • ※ If the applicant applies for overseas remittance, an application for
    overseas remittance and a bank statement or void check which shows his/her name
    and account number are required.

  • A copy of his/her passport

And if you need a third person to collect your funds...


A letter of attorney (it must be notarized from a notary's agency in
the country where the applicant resides and be attested by the Korean
embassy).


  • ※ An applicant should specify that he/she intends the agent in Korea to
    receive his/her lump-sum refund on behalf of him/her. In this case the applicant
    must provide a signed or stamped letter of attorney containing the agent's full
    name, address, etc.

  • ※ An agent living in Korea who has received the letter of attorney should
    get their Korean-translated texts notarized again so the letter's contents can
    be generally identified.- A copy of the applicant's passport

  • An application for Lump-sum Refund

  • ※ An applicant must fill out the "Application by Agent" section in the
    "Application for Lump-sum Refund" form and then notarize it in a notary's agency
    of the country where the applicant resides and attest it in the Korean consulate
    or embassy. If the applicant's letter of attorney is tested by a public notary
    in the country where he/she resides or a Korean consulate or embassy, the
    "Application by Agent" is not necessary.

  • A copy of applicant's ID card (public documents issued by the
    government of the applicant's home country including a passport, social security
    card or other forms of identification)

  • Applicant's bank book (it must be notarized from a notary's agency of the
    country where the applicant resides and be attested by the Korean embassy)

I have never heard of someone not getting their pension money back, so it seems that this is a pretty sure thing if you follow the steps correctly.

If anybody has any questions, just send me an email at asktheexpat@yahoo.com or leave a comment.

2 comments:

Bubbs said...

I began working at a school in Seoul, this past November. The school will not pay a pension. Do I have any options, without getting into a lot of trouble?

Bubbs said...

I began working at a school in Seoul, this past November. The school will not pay a pension. Do I have any options, without getting into a lot of trouble?