By Na Jeong-ju
Staff Reporter
Banks have reached a temporary agreement with unionists to extend the retirement age by one year to 60 on condition that they should adopt a salary peak system, bank officials said Thursday.
So far, Woori Bank, Korea Development Bank and six other banks have introduced the salary peak system in a bid to cut labor costs. The retirement age at the banks is 59, while those employed at other financial firms are required to retire at 58. If banks don't have a salary peak system, the retirement age there will be kept at 58.
With the agreement, a number of financial firms are expected to start debates to introduce the salary peak system, aimed at keeping older skilled employees while securing young talented people at the same time.
The National Union of Financial Industry Workers, the collective bargaining body for the unions at banks and other financial firms, said it earlier demanded banks extend the retirement age by two years.
However, bank management rejected the demand, citing surging wage costs.
After more rounds of negotiation, the union will reach the final agreement on extending the retirement age and other issues within this month, the union said.
According to the Korea National Statistical Office, the country's core productive population, referring to people aged 24-53, is expected to begin declining after reaching a peak in 2009. It warned the economically active population here might start shrinking in three years, saying labor shortages will cut economic growth potential.
``As more companies will suffer labor shortage problems in the coming years, the salary peak system is emerging as an alternative to solve it,'' union official Lee Song-jun said. ``However, the salary peak system means lower incomes for older skilled employees. We can secure the workforce by extending the retirement age.''