Korean Job Discussion Forums

[SSA]

I completed a year with EPIK and pension was deducted monthly from my salary.

Now, I am looking at working in a Hagwon. Some of the bosses say I dont have to pay it.

One contract I am looking at says:

4.4. National Pension
National Pension program will NOT be applied to the Employee.

I am from the UK so I would be very happy to hear that it is not compulsory to make payments every month. During my year with EPIK I gave the Pension scheme 1.2 million that I cannot reclaim.

Can anyone confirm or provide some links/phone numbers where I can get a definate answer on this.

If I must pay monthly, would it be reasonable to ask the employer to pay half (like many positions offer) or increase the salary by 100,000 won per month and then I pay all 9%?

Thanks in advance.

[Snowflake]

We can't get exemption unfortunately as we're not detached workers. This is the answer I got from the Korean Pension service:

"This is in response to your request.

We are sorry to say that there is no provision other than the exemption rule under the Convention on Social Security between Korea and UK so that it is not true that the contributions under the Korean legislation can be transferable to the UK pension scheme.


The reason is as follows. The Korean Pension legislation provides that both Korean and foreign employees in Korea be under the Program so that UK nationals should be under the law.


The Convention mentioned above prescribes only exemption of pension contributions payment in Korea and NI tax payment in UK under certain restricted conditions such as detached workers to each country.

However, if the convention does not apply to a person, the person should be under the residing country�s law. For example, if a UK national is employed in Korea, the person should be under the Korean legislation, not under the UK one, because the person is not a detached worker provided under the Convention. The Korean legislation does not envision any transference of its contributions to other countries� pension scheme.


UK nationals under the Korean National Pension Act are entitled to every Korean benefit if they satisfy its regulation other than lump-sum refund benefit, which is based on the principle of reciprocity. Korean nationals are treated in UK in light of NI taxes same as UK nationals are in Korea in a view of Korean National Pension.


We regret to say that the NPS does not refund contributions to UK nationals when they leave Korea as UK government does not pay back NI taxes to Korean nationals in the same situation.


However, if both countries make a revision on the Convention in the future, it may be possible for the NPS to pay lump-sum refund to UK nationals.

There are some complaints among English nationals because of the terminology, PENSION, used in Korean program. As I mentioned above, the Korean National Pension is equivalent to NI tax in UK.


If you have further questions, feel free to contact us. Thank you"

The UK pension office however explained in more detail that the years in Korea will "count" towards your UK pension. So it pays to pay..as it were...

[OculisOrbis]

Korean - UK Pension Agreement:

http://www.npc.or.kr/jsppage/english/agreement/agreement_02_02_01.jsp

Yes, foreigners are required to be enrolled in the NPS:

Foreigners aged between 18 and 59 working and residing in Korea are subject to the compulsory coverage of the national pension scheme, the same as Korean nationals. If he/she is working in the workplace covered under the scheme, he/she shall mandatorily be a workplace-based insured person and in other cases, an individually insured person.

At the time of the introduction of the Scheme, foreigners were not mandatorily covered. Only foreigners working in a workplace covered under the Scheme could be covered as a Workplace based insured person by submitting an application.
From August 1995, foreigners working at a workplace with 5 or more full-time employees were included in the mandatory coverage. People working at a workplace with less than 5 employees, including the self-employed, were also included in the mandatory coverage from April 1999. Accordingly, at present, foreigners aged from 18 to less than 60 who reside and work in Korea must be, in principle, covered under the National Pension Scheme.

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.

NPS Telephone #: 1355

[Slowmotion]

Quick question, do I have to leave the country in order to collect pension? Or can I just do it at the end of my contract?

[OculisOrbis]

Procedures on How Foreigner can Apply for a Lump-sum Refund
(If an applicant is a national from a country without a social security agreement with Korea)

Applying before departing Korea (If the applicant is in Korea)
The applicant should visit a regional office, having the following documents ready

<Required documents>

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



Applying for a Lump-sum Refund if outside of Korea
An application can be made by an agent or mail.
(1) In the case of an application by mail in a foreign country

<Required documents>

- 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



(2) In the case of an application by agent in a foreign country
In case that an applicant resides in a foreign country, he/she may apply for the benefit by notarizing his/her letter of attorney in the country where he/she resides and has it attested by the Korean embassy.

<Required documents>

- 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)




(3) In the case of application under the MOU through a social insurance institution of the beneficiary's country

○ In order to improve efficiently, convenience and accuracy in paying benefits, a foreign national who has returned to his/her home country can apply for a lump-sum refund through a social insurance institution of his/her country with the same procedure in Korea.

- Persons able to use this method : A national returning his/her home country whose country has concluded the MOU with Korea

- Applicable benefits using this method : Lump-sum Refund, Lump-sum Death Payment or unpaid benefits of the two.

- The Institution receiving and sending an application for pension benefits: Social Insurance Institution of the beneficiary's home country

- The Institution paying benefits and making a notice of it: Korean National Pension Service

○ Current Countries which have concluded the MOU with Korea

- Mongolia (signed on November 15, 2007, entered into force on November 26, 2007)

- The number of country concluding the MOU will be expanded

[Slowmotion]

See they want a plane ticket for claiming it, sounds like I can't get my money unless I leave the country.

[kprrok]

[big_fella1]

Unless you are South African, you must pay pension. Some Hagwons claim that you are an independent contractor to get around paying pension and health insurance. For E2 visa holders there is no way you can be an independent contractor, no matter how they word the contract. For F2's if you are working more than a certain number of hours a month you cannot be classed as an independent contractor.

Some Korean companies were doing this with their Korean staff. The staff took the employers to court and the court ruled that the staff were employees not contractors.

If they cheat on pension and health insurance they may also cheat on your tax as well (i.e. Tax you at 3.3% and remit none of it). If you do things properly you will pay less than 3.3% tax on a hagwon salary. Don't work there.