Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
More foreigners turn to NPS for annuity
The headquarters of National Pension Service located in Jeonju / Yonhap
By Anna J. Park
By Anna J. Park
A lawmaker noted Sunday that an increasing number of foreign nationals living in Korea are relying on the National Pension Service (NPS), the country's state-run pension operator, for funding during their retirement.
According to documents given to ruling Democratic Party of Korea Rep. Seo Young-seok, an additional 512 foreign nationals working here decided to increase their contributions to the NPS ― on top of their compulsory monthly premiums based on their income ― last year, which totaled 3.58 billion won ($2.9 million).
The number is five times more than the 98 people who made additional premium payments in 2016. The additional contributions received by the NPS from such people soared from 500 million won in 2016 to 1.78 billion in 2019, and the 3.58 billion won last year.
Given that only about 7,800 foreign residents here can claim pensions from the NPS, the number of additional premium payments is impressive. The fast-rising number also reflects that a significant portion of them are increasing their dependence on the NPS to guarantee their retirement in Korea.
Through the voluntary additional premium system, adopted in 2016, those contributing can see a greater return in pension payments from the NPS.
Foreigners aged over 18 and under 60 are subject to mandatory subscription to the national pension plan if they work for companies enlisted with the NPS. However, if foreigners' home countries do not provide pension plans for Korean nationals, they're excluded from the plan on the principle of reciprocity.
The premium is 9 percent of an employee's monthly income, half of which is paid by the company.
Last year, 7,796 foreigners received pension payments from the NPS totaling 31.1 billion won, more than double the 14.7 billion received by 3,835 foreigners in 2015.
The number of foreign nationals showing increased confidence in the NPS is in contrast to the low level of trust among Koreans. According to a recent survey, only 20 percent of Korean employees responded that they trusted the national pension system.