Mandatory Pension Contributions:
Since 1999, all foreign workers between the ages of 18 and 60, regardless of the size of the workplace or the number of employees, have been included in the mandatory Korean National Pension Scheme with only a few exceptions. If you fall within one of the following categories, you do not have to be enrolled in the NPS and you do not have to pay the contributions:
1. You are a citizen of one of the 17 nations that do not mandate Korean citizens working in your country to pay into its pension plan: Armenia, Bangladesh, Cambodia, Egypt, Ethiopia, Fiji, Iran, Maldives, Myanmar, Nepal, Pakistan, Saudi Arabia, Singapore, South Africa, Tonga, Vietnam.
2. You are in one of the following categories: culture & art, study abroad, industrial training, general training, religion, etc.
3. You are over 60 years of age
Calculation of Pension Contribution:
The law requires that Korean and Foreign workers be treated equally. According to the NPS, “…there is no discrimination in terms of the benefit amount and remitting benefit abroad, etc.” The contribution is calculated by multiplying the worker’s reported (by the employer) monthly income by the 9% rate (between minimum W220,000 and maximum W3,600,000). Both the employer and the employee each pay an equal amount of the required 9% contribution. The employer deducts 4.5% from the employee’s wage and must make the matching 4.5% contribution payment at the same time.
Pension Contribution Refund:
Although Korea’s NPS policy does not call for repayments of their pension contributions when foreign workers leaving the country. However, if you are a citizen of a nation that grants Koreans working in that country a lump-sum refund (see list below*) or one that has concluded an agreement with Korea to secure benefit rights by combining the insured period in each country: Canada, France, Germany, Hungary and the United States.
*Venezuela, Grenada, Nigeria, Barbados, Saint Vincent and Grenadines, Zimbabwe, Cameroon, Congo, Thailand, Togo, Belize, Ghana, Malaysia, Bermuda, Sudan, Sri Lanka, Switzerland, El Salvador, Jordan, India, Indonesia, Kazakhstan, Kenya, Trinidad and Togo, Hong Kong, Turkey, Colombia, Philippines, and Vanuatu. (List valid as of June 2007 – duration of contributions requirements apply – for more details or up-to-date info visit National Pension Scheme).