Korean Job Discussion Forums

daniellelievre · Joined: 27 Jan 2006

I am thinking about the details of this pension scheme and have some questions I think would be nice to have answered on one page:

1) Is it mandatory for teachers to pay into the pension?
2) Is it mandatory for employers to pay into the pension?
3) Is the 4.5% of the salary taken out of your salary, or in addition to your salary?
4) If there is no pension agreement in the contract, will I ever have to deal with the government about it. Like, will they find out if I'm not paying and do something about it?

Thanks

J.B. Clamence · Joined: 15 Jan 2003

1) I believe your school has to have 5 employees for benefits like pension, health, and severance to be mandatory.
2) If pension is mandatory for you, then your employer must match your contribution every month.
3) what's the difference?
4) No, I don't believe so. If you didn't pay into the plan, then you get no pension. You won't get into trouble for not contributing to your own pension plan because neither the government nor your employer benefits from it; only you do. However, your boss might be doing something illegal if he doesn't sign you up when he should, but does the government really care? Probably not.

Son Deureo! · Joined: 30 Apr 2003

3) It's deducted from your salary, just like a tax.
4) You may get a threatening letter at some point because my boss and I hadn't been paying. That happened to me once. We ignored it (although not by my choice) and nothing has happened to me in the 2 and a half odd years since then.

oldfatfarang · Joined: 19 May 2005 Location: On the road to somewhere.

I'm a Kiwi so it's compulsory for me to pay into the Korean National Pension Plan (sais so on NZ Embassy site).

I've had 4 letters from the Korean National Pension Fund in the last 13 months (received another one today). All these letters said I had to fill out the enclosed form and give it to my employer so he can start pension deductions.
I haven't yet, and am not going to pay into this pension fund either. My school would probably fire me if I cost them another 4.5 % in wages.

PS. All these letters were in English and Korean, gave a very helpful telephone number for enquiries, and ALL SAID I HAD TO START PAYING BY A CERTAIN DATE.

I await further developments.

Homer · Guest

1) Is it mandatory for teachers to pay into the pension?

Yes

2) Is it mandatory for employers to pay into the pension?

Yes

3) Is the 4.5% of the salary taken out of your salary, or in addition to your salary?

Deducted from your salary ( by the way your employer pays the same amount into the pension plan as you do)

4) If there is no pension agreement in the contract, will I ever have to deal with the government about it. Like, will they find out if I'm not paying and do something about it?

As Son Deuro said...some don't and get away with it. Some who do not pay get busted and have to pay into the fund retroactively (i.e. all the back months that went unpaid) plus pay a fine (the back paying and fine applies to the school as well). It is a toss up.

Dodgy Al · Joined: 15 May 2004 Location: Seoul

Homer, do you know anyone who has had to pay a fine or backdate pension payments? you've got me a little scared as i haven't paid anything for the last two years (and also don't want to as i'm a Brit, so won't see any of it again until i'm nearly dead!).

How much is the fine? Thanks Smile

Son Deureo! · Joined: 30 Apr 2003

I know a lot of people who haven't ever contributed to pension , and none of them ever got into any trouble over it.

YMMV, but I'm not losing any sleep over it.

Big Mac · Joined: 17 Sep 2005

daniellelievre · Joined: 27 Jan 2006

From my understanding as an American or Canadian citizen, we get all the pension money back at the end. That would mean I'm giving up 1,188,000won a year by not getting pension in the contract right? i could see why you wouldn't want the pension if you weren't allowed to get the money back, but I am allowed to.

J.B. Clamence · Joined: 15 Jan 2003

Big Mac · Joined: 17 Sep 2005

Homer · Guest

Dodgy Al,

Since I have been in Korea I know of a few cases where teachers and schools were busted for not paying into the pension scheme.

Some of these situations resulted in the school and teacher having to pay the back months in one payment along with a penalty (for the teacher) and a fine (for the school).

Some were resolved otherwise by the school (i.e. the school must have had some connections with the government...a practice that works the world over! Laughing

).

I would not say it is a high risk but it exists nonetheless. Up to you to make a choice.

Personally, I would make sure I am on the right side of the law when it comes to taxes and other financial matters, but thats just me.

As Son Deuro has said, he has not paid into the fund and to date has not suffered in any way for it.