By Kim Yoo-chul
SK Telecom, the nation's top mobile carrier, said Sunday that it will extend its retirement age to 60 from 58 because the firm will be introducing a "wage peak" system from this year.
"SK Telecom's management and labor union agreed to extend the retirement age to 60 by introducing a wage peak system this year," it said in a statement.
Upon the agreement, SK Telecom employees will see a 10-percent salary reduction from the age of 59.
But the two sides agreed not to raise the "basic monthly salary" citing challenging market situations that the carrier is facing.
SK Telecom is being challenged by its two local rivals ― KT and LG Uplus ― to entice more customers using mobile devices that support an advanced long-term evolution (LTE) wireless tech.
The agreement comes after an amendment to an existing law that increases the minimum normal retirement age to 60 was passed on April, last year.
The amendment, a response to a gradually aging workforce in South Korea, takes effect starting in 2016 for large companies and in 2017 for small firms.
"The increase in the minimum retirement age reflects government measures to cope with an aging population. SK has been consistent in meeting with several key government-led initiatives," said an executive at the carrier by telephone.
The executive said SK Telecom's workforces are getting old.
"Employers should review their wage and fringe benefit plans for their workforces from the long-term perspective, such as health care and retirement to reflect this shift," he said.
Affiliates of Samsung, LG and Hyundai Group ― the nation's leading conglomerates ― also announced that they will extend normal retirement age by introducing the new salary system.