Public Service

Payment

The pension fund is a payment implemented by the government to protect the employee in case of a tragedy or retirement, which are the only cases the money is refunded to the employee. Companies are required to contribute an amount equal to 9% of employee salaries to the national pension refund. This fund is comprised of 4.5% borne by the employer, and another 4.5% payment borne by the employee, deducted from monthly pay. Employee contributions to the national pension program are not tax deductible. This national pension contribution is capped at a monthly salary of 3,600,000 won. Thus, the maximum monthly pension contribution to be paid by an employee is 162,000 won.

Refund

Under the National Pension Act, a lump-sum refund may only be paid to non-Korean nationals if they are nationals of countries with social security systems that pay corresponding contribution refunds to Korean nationals or if provided for by an agreement. All foreigners are eligible for a lump sum refund of Premiums paid, if they are from countries that have 'totalization agreements' with Korea, and if the foreigner leaves Korea or meet other eligibility requirements. The United States and Canada have negotiated totalization agreements with Korea. The United Kingdom has negotiated a contribution only agreement. This means that a foreigner from the United Kingdom who is employed in Korea may benefit from the elimination of dual coverage, but will not get a lump sum refund.

If you submit your application in your home country, that agency will forward it to Korea. Many employees do apply in Korea before leaving the country and arrange the refund as well. Countries such as New Zealand, Australia, Ireland, and South Africa have not signed any agreement. Therefore citizens from these countries cannot claim any refund or reciprocal payments after paying Korean Pension tax.

To apply for the refund, you will need the following documents:

For more information regarding the Korea Pension System, go to: http://npc.or.kr