Korean Job Discussion Forums

Adventurer · Joined: 28 Jan 2006

A friend mine was told by a pension person that if her contract didn't say she should get pension then he doesn't have to pay it. I never heard of that before when I looked at the pension site. And the pension people at the office she went to didn't seem concerned about things and tried to brush things off as her being registered as a business or something, and there are other foreigners there, and they are being wimps and not bothering to do anything. Anyway, what is the exact law on pension, then, since the pension people she dealt with didn't do anything. Must she go to court?

luv2dance79 · Joined: 01 Jun 2007 Location: Suwon

I've posted this a few times when people have asked this question. I went through the same thing. They know the business isn't registered properly, but they (the pension office) won't do anything. The link below will explain what I was told in an e-mail from the pension office.

http://forums.eslcafe.com/korea/viewtopic.php?t=105605&highlight=luv2dance79

tob55 · Joined: 29 Apr 2007

It is law and the employer should be paying pension. Others have all of the particulars, but suffice it to say, they are probably hiding something from the tax people which is why they do not want to pay into the National Pension for their employees.

zizi · Joined: 01 Dec 2007 Location: Korea

Adventurer · Joined: 28 Jan 2006

Well, I was urging my friend to report this, because I wanted her to do it for the Americans and Canadians still working there. They don't seem to be doing anything about it. I think us old-timers have to try to make things better for those coming after us, so I am doing my part. I told her to go to the downtown office. I appreciate Frankenstein's posts about the matter. I once had to contact pension before for my own personal needs.
I am going to call them to make sure the math adds up in my case.
Anyway, my friend's boss was nervous when he foun out she was dealing with pension, but the pension people were not looking to do their job and siding with the boss. They were saying the contract should say the pension would be paid. That is not what the governnment's website says, so why are these people saying that? I once dealt with a regional office, and they didn't tell me BS like that.

spliff · Joined: 19 Jan 2004 Location: Khon Kaen, Thailand

I've never had any problems w/ employers paying and me receiving pension money. I guess if you don't look like the type of dork that is easily gotten over on that reduces the temptation for Korean employers to save a buck.

Adventurer · Joined: 28 Jan 2006

ontheway · Posted: Tue Apr 08, 2008 8:41 am Post subject:

If your pension is close to 4.5% it could be correct.

The Korean pension system is NOT an exact percentage. It is based on brackets. Your pension amount is 4.5% of the midpoint in each bracket. If your pay is higher than the midpoint then you would and your employer would each pay in slightly less than 4.5%, if your pay level is below the midpoint then you should each pay in slightly more than 4.5%

Also, Korean pension is by invoice based on your base salary. Each month your employer recieves an invoice for pension amount according to the pay level he has reported as your base pay. The amount will be the same every month. Overtime, bonuses etc. are not included and should not be taxed for pension.

Adventurer · Joined: 28 Jan 2006

prairieboy · Joined: 14 Sep 2003 Location: The batcave.

Pension contributions are made based on your projected salary, not your actually monthly pay like income tax.

If your standard pay is 2.5 million, then your pension contributions would be reflective of this level of income regardless of whether you earned more or less in any particular month.

So, whatever your monthly salary is supposed to be under normal circumstances, use that as your point of reference for your calculations. It should be very close if the contributions are being deducted properly.

Health insurance premiums are calculated in a similar manner.

Cheers

Adventurer · Joined: 28 Jan 2006

thetraveler · Joined: 24 Mar 2008

So having pension included in a contract is pretty important?

prairieboy · Joined: 14 Sep 2003 Location: The batcave.

If your base pay is 2.0 million then your projected income for Pension calculations is 2.0 million per month. Your overtime and any other payments not included in your base salary are not included.

2.0 million x 4.5% = 90,000

You are getting a deduction of 88,000 per month for pension, which is about right.

If your, housing allowance is supposed to be part of your salary, then yes, it should be included in the calculation. But it wasn't accounted for in the original calculation. There may be a need to recalculate your contribution rate, but you'll have to confirm that with the pension office.

Check with the NPC office nearest you.

Cheers

thetraveler · Joined: 24 Mar 2008

The better question is, is it illegal to not have pension part of the contract?

prairieboy · Joined: 14 Sep 2003 Location: The batcave.

In my opinion, I think it's a very good idea to have pension specifically mentioned in the contract.

As with all things, and in particular relating to the posts that appear on this board relating to pension, health insurance, taxes, etc., it's best to have everything clarified up front.

Is it illegal not to mention pension in a contract? I don't think it's illegal to leave it out since it's supposed to be provided by law. But again, in light of the "sub-contractor"/"self-employed" English teacher scam, it would be a good idea to have it included.

If an employer is not willing to do that or is not willing to show you the rules and regulations for the operation of the business that relate to pension, health insurance, taxes, etc. then it's probably a good idea to pass on them and look elsewhere.

Cheers