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PatrickBateman
Joined: 08 Jun 2009
Location: American Gardens Building, West 81st Street
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 Posted: Mon Jun 15, 2009 4:03 am Post subject: Pension plans. How do they work? How do you qualify |
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Sorry, the search function was terribly slow and eventually timed out. I was just curious about how these work? How do you qualify? Could someone link me to something or drop some facts. I'm from the United States and I'm totally clueless about it.
Thanks. |
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WendyRose
Joined: 10 Dec 2008
Location: hanam-si, seoul
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PatrickBateman
Joined: 08 Jun 2009
Location: American Gardens Building, West 81st Street
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| Posted: Mon Jun 15, 2009 4:38 am Post subject: |
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Awesome.
Thank you. |
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PatrickBateman
Joined: 08 Jun 2009
Location: American Gardens Building, West 81st Street
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| Posted: Mon Jun 15, 2009 6:28 am Post subject: |
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Okay, I read through the majority of that and I'm still a big confused.
1. Is this something that automatically comes out of my paycheck each month?
2. If not, is it something I should tell my director about?
3. Is everyone qualified for a pension plan? My friend said he doesn't have one and doesn't contribute anything towards one. |
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Otherside
Joined: 06 Sep 2007
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| Posted: Mon Jun 15, 2009 8:31 am Post subject: |
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| PatrickBateman wrote: |
Okay, I read through the majority of that and I'm still a big confused.
1. Is this something that automatically comes out of my paycheck each month?
Yes and No. Yes, it should automatically be deducted. However, your director should deduct the money and then submit it (+his matching contribution) to the pension office).
2. If not, is it something I should tell my director about?
What do you think? If you want pension and you don't have it, it's not going to fix itself.
3. Is everyone qualified for a pension plan? My friend said he doesn't have one and doesn't contribute anything towards one.
Yes, everyone is qualified for the National Pension plan. With regards to E-2 teachers, all teachers with the exception of South Africans have to pay into the National Pension. As an American, it is in your interest to contribute to the Pension plan as 4.5% of your salary + an equal matching contribution from your employer is paid each month, AND you can withdraw the lumpsum when you leave. There are some exceptions, such us private University pension plans etc, however, unless you work at a University with their own plan (in which case they would have enrolled you) it's a non-issue.
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Some comments. This is what I think has happened. You work at a Hagwon right? Your boss has registered you as an independent contractor (pretty much illegal as he is sponsoring your visa and thus you can't be "independent" however it's quite common practice with the shadier hagwons).
Brief rundown of the Independent contractor:
Pros for Boss:
1.Less paperwork,
2.He doesn't have to contribute to health insurance or pension. Saving lots of money.
3. As the indepedent contractor system is pretty open, it makes it easier for him to undereport your earnings thus pocketing the difference in taxes etc. (or not registerring you at all, at pocketing all the taxes, etc)
1 and 2 are definites, no.3 is a solid "happens alot"
Pros for you.
None.
Cons for you.
Pay tax at a higher rate 3.3% vs about 1.9-2.0% (for std ESL salarys)
No pension,
No Medical (this one is a 50/50) |
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PatrickBateman
Joined: 08 Jun 2009
Location: American Gardens Building, West 81st Street
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| Posted: Mon Jun 15, 2009 10:44 am Post subject: |
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| Otherside wrote: |
| PatrickBateman wrote: |
Okay, I read through the majority of that and I'm still a big confused.
1. Is this something that automatically comes out of my paycheck each month?
Yes and No. Yes, it should automatically be deducted. However, your director should deduct the money and then submit it (+his matching contribution) to the pension office).
2. If not, is it something I should tell my director about?
What do you think? If you want pension and you don't have it, it's not going to fix itself.
3. Is everyone qualified for a pension plan? My friend said he doesn't have one and doesn't contribute anything towards one.
Yes, everyone is qualified for the National Pension plan. With regards to E-2 teachers, all teachers with the exception of South Africans have to pay into the National Pension. As an American, it is in your interest to contribute to the Pension plan as 4.5% of your salary + an equal matching contribution from your employer is paid each month, AND you can withdraw the lumpsum when you leave. There are some exceptions, such us private University pension plans etc, however, unless you work at a University with their own plan (in which case they would have enrolled you) it's a non-issue.
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Some comments. This is what I think has happened. You work at a Hagwon right? Your boss has registered you as an independent contractor (pretty much illegal as he is sponsoring your visa and thus you can't be "independent" however it's quite common practice with the shadier hagwons).
Brief rundown of the Independent contractor:
Pros for Boss:
1.Less paperwork,
2.He doesn't have to contribute to health insurance or pension. Saving lots of money.
3. As the indepedent contractor system is pretty open, it makes it easier for him to undereport your earnings thus pocketing the difference in taxes etc. (or not registerring you at all, at pocketing all the taxes, etc)
1 and 2 are definites, no.3 is a solid "happens alot"
Pros for you.
None.
Cons for you.
Pay tax at a higher rate 3.3% vs about 1.9-2.0% (for std ESL salarys)
No pension,
No Medical (this one is a 50/50) |
Thanks for the update. I'm not sure if they have or have not registered me as an independent contractor. I haven't received my first pay check yet, so I was going to wait and see. Also, I do have a medical plan set up. I was wondering all of this because nobody has told me anything, I've just had a discussion with my co-workers. |
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