On Pensions and Healthcare

Here's the question:

I heard there is a number that we can call to check to see if our hagwons are taking out the right amount of money for the pension and to make sure they are taking it out! Also, if you have an ARC card does that automatically mean you have health coverage? My friend works for a school that was saying they weren't going to register for the pension which I think means she will not have health coverage. If you have info or a number I can call to confirm this that would be great!

First of all, you've gotta keep every pay stub that your employer gives you. If they don't give you one, then demand it. Once you've worked for a few months, then you can start comparing deductions to make sure they're being honest. Always be organized and stay on top of anything related to money. Not only will it help you avoid any potential problems, but it keeps the school in check for future teachers as well.

Depending on nationality, your employer is forced to pay into your pension. The amount, of course, depends on your salary. You won't be able to call the pension office and get private information on the phone, but you can go there with your passport and ARC. Just take a look at the Pension Office website for location details.

You have insurance. Having your ARC doesn't give you health coverage automatically, but it does suggest that your school is officially sponsoring your visa which gives you government insurance. Paying into insurance isn't an option. As a tax-paying citizen, you have to pay into it. The pension has nothing to do with health insurance. Your friend needs to talk to the school and get their insurance card (it looks like a book). That should be easy enough. If they refuse then something is wrong and a call to the Labor Board should clear that up.

How to Pull a Midnight-Run

Here's the question:

Will immigration stop you if you leave the country early from your school in South Korea? My brother wants to leave, but he's worried he would get stopped at the airport. Can they do that?

Easy one here. No they can not. Immigration has no right or authority to forbid anyone from leaving the country so long as they have not committed a crime worthy of detention. If he wants to leave because he is unhappy, then there is nothing (besides guilt from quitting) stopping him in the least. As I have said before, I don't like it when people bail early. It's disrespectful to your employer and to your fellow teachers.

Of course, the situation could be really horrible and I understand that he might might need to bail. If that's the case and he doesn't want to tell his employers, then a silent midnight-run is what he needs.

For a successful midnight-run:

Don't tell anyone!

This means that you shouldn't even tell your close friends or co-workers. Oftentimes, co-workers will be angry at you because it will increase their workload. If they know you're thinking about it, they might try to lay it on thick or tell the school about your plans.

Leave a note with enough money to pay for your utilities

Even though the school is out some cash because of you, they will still want to make sure you're not dead or hurt. If you leave a note explaining your decision, they will appreciate the effort (even if they are angry about your decision). You should also leave 50 bucks or so alongside the note. The school should not have to pay YOUR utility bills.

Clean your apartment

If you leave your place trashed or intentionally trash it before you go, then the school might get on the horn claiming that you are a criminal and damaged the apartment intentionally. Clean it up. Do the dishes. Wash the sheets. It's the least you can do.

Make sure you get what you earned

I know some people might not like this one, but things happen in life and situations change. Make sure you get your paycheck before pulling a run. You earned it, so why not collect? Don't, however, be a total dick and get your paycheck, plus a payment advance and THEN bail. That's low.

Leave as late at night or early in the morning as possible

This is crucial. You never know what's going to happen with weather, so do yourself a favor and be on the plane and en route to your home country BEFORE your employer discovers your gone. Buy your bus ticket to the airport early. If you live outside of Seoul, consider heading to Incheon the night before and, if you can't get a late night flight, then stay in a cheap motel and catch the first flight out.

If you follow those steps, then you should have no problem getting out of the country with relative ease. Now, what if your school is holding your diploma? Get it back. What about your pension? In most situations, it could be difficult to get it, but there's no reason not to try. Check out my post on pension collection for more on that.

Pulling a midnight-run is a low move, but sometimes it's what you gotta do. I hope that this particular case is more of the "I have a family emergency" kind, rather than the "I don't like teaching" excuse. Either way, be safe.

Pension Contribution and Lump-sum Payment for British Teachers in South Korea

Here's the question (in response to the post on pensions):

I'm British and as far as I know, Yes we do have to pay the 4.5% into a pension fund! That's what I've been doing since 2001 at YBM ELS and they are clued up and legit on all this stuff. I've also checked it out at the local pension office in Daegu.

Brits don't get a lump sum refund. They get zero. I've read on some blogs that apparently payments here can be credited to your pension history in the UK. NOT according to the guy I spoke to in Newcastle Upon Tyne, the main UK centre. The only thing possible (which is in the extract from the pension act which you listed) is that after 10 years of contributions, you can receive a monthly pension from Korea when reaching 60. How many teachers stay 10 years!!?

If you know anything different or more positive than this PLEASE let me know. I live in hope! Thank very much

Catriona

There also seems to be a discrepancy between what the law says should happen and what is happening. The law states that citizens of the UK must pay into the National Pension Fund every month. However, since there is a contribution-only convention in place, no lump-sum payments are made when leaving Korea. And yet, I have talked to several British teachers today who are working in different educational mediums and none of them are paying into the pension fund. I know that YBM is on the up and up, but this issue is proving to be more vexing than I originally thought.

Galbijim says, "Unlike the US and Canada, Korea and the UK have only agreed to a 'contribution only' convention, at this time. What this means to UK citizens working in Korea, is that your Korean pension contributions can be added to your accruing pension credits in the UK, of which you can begin to receive when you retire in that country."

I read the 12 page agreement that can be found on this site under the UK Social Security link and it said nothing about 10 years, but that doesn't mean it's not true. It appears that there is not a clear answer to this, so I would suggest you write several detailed emails to the HMRC and see how diverse the replies you get are. Maybe a few truths will be revealed.

Might I suggest that if you do find out that you must be here for ten years, then why don't you stay for another year a half (which would put you at ten years) so you will get those benefits that you've been paying into for the past eight years.

-Or-

You can come back to Korea when you're 60 and retire.

I wish I could say that I had a definitive answer, but this one is tricky. The law states that you should get those benefits back in the UK, so I guess we have to assume that is what is what will happen. Of course, this doesn't help with the fact that so many British teachers are not paying into their pension every month or that the fellow you talked to told you something different as well. I'm going to ask around on my teacher group and see what I come up with. I'll update this soon.

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

Tax on Severance Pay for Teachers in South Korea

Here's the question:

Do you happen to know if taxes are supposed to be withheld from severance pay. For example, if my salary is 2.2M, should the severance be 2.2M or 2.2M minus taxes?

Thanks!

Nathan

All income earned is taxable and since your severance pay is part of your annual salary, it will be taxed as well. I know that job advertisements often make a point to seperate severance pay from the monthly salary by using words like "bonus" or "extra", but when it comes down to it, it's just part of your income and you must pay taxes on it. I'm sure there are some hagwon owners out there that try to skirt the tax law and pay under the table for one reason or the other, but in most places, you will be taxed.

On a side note, Nathan included his photoblog address in the email and I think it's worth mentioning. Check it out: Wandering, learning, sharing...

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

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.