Recently I got an email question from a foreign teacher in certain Korean private university. He’s wondering why the university is insisting on retirement pension plan instead of severance payment.
There is an act called Pension for Private Teachers and Staff Act(PPTSA) in Korea, which regulates severance payment issues in private school. As a matter of law, PPTSA is applied prior to the GWRBA(Guarantee of Workers’ Retirement Benefits Act) and it allows the private schools to set a retirement pension plan for its employees.
With respect to the relationship between the employment contract and the pension plan under PPTSA, Private Universities usually, pursuant to the PPTSA, put the retirement pension clauses, instead of severance payment, in the Rules of Employment(RE) of its own. As a matter of law, the RE is applied to all the workers in a workplace. That means, if there exists a RE which includes retirement pension scheme when you’re entering into an employment agreement with the private university, the both parties are bound to the RE, even though you’re not a member of labor union or you didn’t agree with the RE, i. e. the retirement pension clauses (not a severance payment) in the RE shall be applied to you.
But don’t worry, the PPTSA does also guarantee the minimum retirement pension, which is one month’s salary for each year of employment. Per the employee’s request, the private school and the Korea Teachers Pension Foundation (the official administer of the pension under PPTSA) should provide the breakdown of the retirement pension to him or her.
If you have more questions regarding this issue, please send an email to Mr. Wonil Chung, a Korean licensed lawyer at askkorealaw@gmail.com.
© 2009 Wonil Chung, a Korean Labor Lawyer/Chung & Partners, a Korean Labor Law Firm. All rights reserved. Some copyrights, photos, icons, trademarks, trade dress, or other commercial symbols that appear on this post are the property of the respective owners.
Where can I get pdf copies of the Pension for Private Teachers and Staff Act (PPTSA) & the GWRBA (Guarantee of Workers’ Retirement Benefits Act)?
Is the GWRBA the same as the ENFORCEMENT DECREE OF THE EMPLOYEE RETIREMENT BENEFIT SECURITY ACT available of the Ministry Employment and Labor’s website?
Thanks