 1. What is National Pension Service? |
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The National Pension Service was established to provide pension benefits in contingency of old-age, disability or death of a breadwinner with a view to contributing to the livelihood stabilization for the promotion of the welfare of the nation.
- The National Pension Service functions to collect contributions, maintain records of the Insured Persons, pay benefits, operate fund and implement welfare programs for the insured persons and pensioners.
- The National Pension Scheme made a first step to its implementation with 656 staff members in 6 departments and 15 divisions of its head office, as well as in its 14 branch offices when it was established in Oct 19, 1987. Since then, the National Pension has been extended to cover workplaces with 1 or more full-time employees as well as farmers & fishermen, and to pay Special Old-age Pension. As its workload and expertise has increased, its staffs and structure have also been expanded. Currently about 4,900 people are working in its headquarters (9 departments, 1 team, 1 center), Fund Management Center, the National Pension Research Center, the Social Insurance Information Portal Center, 91 Regional offices, 5 Consolidated Support Service Centers and 22 Field Offices.
[Quotation from SEC] |
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| 2. National Pension for Foreigners |
At the time of the introduction of the Scheme, foreigners were not mandatorily covered. Only foreigners working in a workplace covered under the Scheme could be covered as an Workplace based Insured Person by submitting an application.
Foreigners working at the workplace with 5 or more full-time employees were included in the mandatory coverage in August 1995 and those working at the workplace with less than 5 employees including self-employed foreigners were also included in the mandatory coverage in April 1999. Accordingly, foreigners aged from 18 to less than 60 who reside in Korea must be, in principle, covered under the Scheme. But foreigners falling under any of the following items are excluded from the coverage.
- Those whose country does not mandatorily cover Korean citizens under its pension scheme.
=> Under this rule, only the nationals from 18 countries※ do not have to enroll and pay the NPS contributions.
※ the Republic of South Africa, Nepal, Russia, Maldives, Nyanmar, Bangladesh, Vietnam, Saudi Arabia,
Armenia, Ukraine, Ethiopia, Iran, Egypt, Tonga, Pakistan, Fiji, Cambodea, Singapore
- Foreigners who are not registered under the Immigration Act, or to whom the forced deportation order
has been issued under the same Act, or who are staying in Korea without being permitted to extend their
term of stay.
- Among the registered foreigners under Immigration Act, those whose stay status falls under any of the
followings; culture & art, studying abroad, industrial training, general training, religion, visiting & living
together and others.
- People excluded from the mandatory coverage of National Pension Scheme, by the social security
agreement.
- Foreign Insured Persons under the National Pension Scheme are equally treated as the national Insured Persons. For example, there is no discrimination in terms of the benefit amount and remitting benefit abroad, etc. But there is a certain distinction in regarding Lump-sum Refund. In principle, Lump-sum Refund is not paid to foreigners leaving Korea after having been covered under the Scheme. But, in the case of foreigners falling under any of the following items, Lump-sum Refund is paid.
- People whose country grants Koreans a benefit corresponding to Lump-sum Refund under the National
Pension Scheme.
=> Under this rule, only the nationals from 29 countries※ may receive the Korean lump sum refund.
Please refer to Article 102 of the National Pension Act and Article 85-3 of the Enforcement Decree of
the National Pension Act.
※ Venezuela (if completed at least 24 months of periods of contributions) ; Grenada, Nigeria, Barbados,
Saint Vincent and Grenadines, Zimbabwe, Cameroon, Congo, Tahiland, Togo(for the 9 countries above,
if completed at least 12 months of periods of contributions) ; Belize (if completed at least 6 months of
periods of contributions) ; Ghana, Malaysia, Bermuda, Sudan, Sri Lanka, Switzerland, El Salvador,
Jordan, India, Indonesia, Kazakhstan, Kenya, Trinidad and Tobago, HongKong, Turkey, Colombia,
Philippines, Vanuatu ; (as of January, 2007)
- People whose home country has concluded a social security agreement with Korea to secure benefit rights by combining the insured period in each country.(Refer to "Social Security Agreement")
※ As of June 2007, Canada, The U.S., Germany, Hungary, France
- A person who is employed at the workplace covered by the National Pension Scheme as a foreign worker stipulated in [The Act on the Employment, etc. of Foreign Workers]
=> status of stay E-9(Non-professional employment) or H-2
- A person who is employed at the workplace covered by the National Pension Scheme as a person who has status of sojourn eligible for doing industrial trainee activities and doesn't desert designated training places during required training period under [Immigration Control Act]
=> status of stay E-8(Employment for training)
(If you are a national from non-contracting states)
- - If you reside in Korea
You should visit a regional office, having the following documents ready
< Required documents >
- An Application for Korean Benefits (The form is ready at the regional offices.)
- a copy of your ID card
- your local bankbook.
- A copy of an airline ticket. (the date of departure has to be in less than a month from the date of the claim)
- If you are insured under the other public pension schemes, a certificate of employment and a copy of a
certificate of coverage should be presented.
- If you reside overseas
A claim can be made by an agent or mail.
(1) In case of a claim by a relative living in Korea
※ the legitimate scope of relatives: spouse, lineal ascendants or descendants , siblings, parents in law, spouses of lineal descendants, siblings in law.
< Required documents >
- An Application for Korean Benefits
- A hand-written letter of attorney
- A copy of your passport
- A family register document confirm a relative's relations.
(※ It will be attested by the korea embassy.)
- An ID card of an agent
- A copy of an agent's or your local bankbook (if you apply for overseas remittance - Application For Overseas
Remittance and a bank statement or void check which shows your name and account number are required)
(2) In case of a claim by attorney in a foreign country
In case that you reside in a foreign country, you may apply for the benefit by notarizing your letter of attorney in the country and it will be attested by the korea embassy.
< Required documents >
- A letter of attorney should be notarized from a notary's agency of the country in which you reside and it will be
attested by the korea embassy.
※ You should make it clear that you intend the agent(Resident registration number, Full name, Address, etc.) in Korea to receive your lump-sum refund behalf of you in a letter of attorney in which your stamp or signature appear.
※ An agent living in Korea who has received the letter of attorney and the document above should get their Korean-translated texts notarized again so the letter's contents
- A copy of your passport
(3) In case of a claim by mail in a foreign country
< Required documents >
- An application of attorney should be notarized from a notary's agency of the country in which you reside and it
will be attested by the korea embassy.
- A copy of your local bankbook(if you apply for overseas remittance - Application For Overseas Remittance and
a bank statement or void check which shows your name and account number are required.)
- A copy of your passport
[Quotation from SEC] |
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| 3. National pension overview |
- A social security agreement is concluded to benefit the nationals of contracting countries through the coordination of those countries' different social security systems. It has four basic objectives, as follows: ..
First, the agreement aims to reduce the financial burden on persons (e.g., detached employees or self-employed persons working abroad for the short term) who would otherwise have to pay social security payments to both countries. As a result, contributions can be paid to only one system of either country. (However, detailed contents can vary depending on the respective agreement.)
⇒ Elimination of Dual Coverage
Second, the agreement aims to help persons, either long-term residents in foreign countries or immigrants, who have divided their careers between two countries. Those people can acquire benefit eligibility according to the total periods of coverage in both countries. Without totalization, they would not acquire benefit eligibility under one country's national law alone as a result of insufficient periods of coverage. (However, detailed provisions can vary depending on the respective agreement.)
⇒ Totalization of Periods of Coverage
Third, the agreement aims to improve the conditions of benefit eligibility. It ensures that nationals of one contracting country are treated equally with nationals of the other contracting country in the application of the other contracting country's social security system, regarding eligibility for and the payment of benefits. (However, detailed provisions can vary depending on the respective agreement.)
⇒ Equal Treatment
Fourth, the agreement aims to guarantee that benefits are remitted overseas without restrictions even though a person stays in the other contracting country. Therefore, the person who has acquired benefit eligibility will not receive reduced benefits only because he/she stays in the other contracting country. (However, detailed provisions can vary depending on the respective agreement.)
⇒ Overseas Remittance of Benefits
- Most social security agreements are made between the governments of two countries. There are two types of agreements: Totalization Agreement and Contributions-only Agreement. Each Agreement is made according to the scope of application.
< Totalization Agreement >
- This social security agreement includes provisions on totalization of periods of coverage between two
countries as well as the Elimination of Dual Coverage.
- A person from one contracting country who is employed or self-employed in the other contracting country for the
short period of time can normally be covered only under one contracting country's pension system during
his/her working period. For example, an employee sent to work in a foreign country by his/her company, which
is based in his/her home country, will only have to pay into his/her home country's social security system.
- In addition, a person who has coverage in two countries may acquire benefit eligibility by totalizing his/her
periods of coverage in both countries. Without totalization, the person would not acquire benefit eligibility
under one country's national law alone as a result of insufficient periods of coverage.
- The agreements with Canada(entry into force on May 1, 1999), the United States (entry into force on April
1, 2001), Germany (entry into force on January 1, 2003), and Hungary (entry into force on March 1, 2007) fall,
and France (entry into force on June 1, 2007) fall under this type of totalization agreement.
< Contributions-Only Agreement >
- This social security agreement only includes elimination of dual coverage of pension systems but does not
provide totalization of periods of coverage.
- A person from one contracting country who is employed or self-employed in the other contracting country for the
short term, such as a detached person, can normally be covered only under one contracting country's
pension system during his/her working period.
- Provisions concerning benefits such as Totalization of Periods of Coverage, Protection for Entitlement to
Benefit, Equal Treatment, and Payment of the Lump-sum refund are generally not included.
- The agreements with the United Kingdom (entry into force on August 1, 2000), China
(entry into force of provisional measures on February 28, 2003), the Netherlands (entry into
force on October 1, 2003), Japan (entry into force on April 1, 2005), Italy (entry into force on April 1, 2005),
Uzbekistna (entry into force on May 1, 2006) and Mongolia (entry into force on March 1, 2007) fall under
this type of contributions-only Agreement.
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- Since nationals of the contracting country (Canada, the U.S., Germany, Hungary, and France) are treated equally with Korean nationals regarding benefit payment, they are eligible for a Lump-sum refund as well as pension benefits. Therefore, if you, a national of Canada, the U.S., Germany, Hungary, of France, die, permanently leave Korea, reach age 60, or meet other conditions of entitlement for the Lump-sum refund before qualifying for the Old Age, Disability or Survivors pension under the National Pension Act, the Lump-sum refund may be paid to you or your survivors (in case of your death).
If your country does not have a social security agreement with Korea, you are not treated equally with Korean nationals regarding the Lump-sum refund, but are treated according to a reciprocity rule. Under this rule, only the nationals from 29 countries※ may receive the Korean Lump-sum refund. Please refer to Article 102 of the National Pension Act and Article 85-3 of the Enforcement Decree of the National Pension Act.
※ Venezuela (if at least 24 months of periods of contributions are completed.); Grenada, Nigeria, Barbados, Saint Vincent and Grenadines, Zimbabwe, Cameroon, Congo, Thailand, Togo (for the 9 countries above, if at least 12 months of periods of contributions are completed); Belize (if at least 6 months of periods of contributions are completed); Ghana, Malaysia, Bermuda, Sudan, Sri Lanka, Switzerland (limited to those who have lost his/her insured status since January 1, 1997), El Salvador (limited to contributions paid after April 1998), Jordan, India, Indonesia, Kazakhstan (limited to contributions paid after January 1998), Kenya, Trinidad and Tobago, Hong Kong, Turkey, Colombia, Philippines, Vanuatu; (as of January, 2007)
In addition, a person who is employed at the workplace covered by the National Pension as a foreign worker stipulated in [The Act on the Employment, etc. of Foreign Workers] and a person who is employed at the workplace covered by the National Pension as a person who 'has status of sojourn eligible for doing industrial trainee activities and doesn't desert designated training places during required training period' under Article 10 of the [Immigration Control Act] are eligible for the Lump-sum refund.
[Quotation from SEC] |
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| 4. Frequent Question |
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I am planning to leave Korea this month. How can I apply for a Lump-sum Refund and what documents do I need for application?
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You should visit our regional office and bring some documents. They include an Alien Registration
card and passport), an airline ticket to confirm emigration from Korea (the date of departure should be less than a month from the date of claim), and a bankbook/bank statement/void check.
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In which circumstances am I eligible for a Lump-sum refund? |
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A Lump-sum refund is payable
(1) to a national whose country gives Koreans benefits corresponding to the lump-sum refund.
(2) to a national whose country has concluded a social security agreement(totalization) with Korea (Article102.2 and Article 102-2 of the National Pension Act)
There are four circumstances in which you may be eligible for a Lump Sum Benefit under the Korean National Pension Act:
- the death of a contributor with less than ten years of coverage under the Korean National Pension Act,
- reaching age 60
- being insured under any other public pension scheme in Korea
- loss of Korea nationality or emigration from Korea.
【Countries that grant Lump-sum Refund】
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Countries that
provide Lump-
sum refund
under the
Social Security
Agreement
(5 countries) |
Countries that Provide a Lump-sum Refund based on the Principle of Reciprocity
(29countries) |
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With Minimum Insured Period |
Without Minimum Insured Period
(18 countries) |
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Over 6 Months |
Over 1 year(9countries) |
Over 2years |
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Germany,
The United
States,
Canada,
Hungary
France |
Belize |
Grenada, Nigeria,
Barbados ,
Saint Vincent and
Granadine,
Zimbabwe, Cameroon,
Congo, Thailand, Togo |
Venezuela |
Ghana, Malaysia, Vanuatu,
Bermuda, Sudan, Sri Lanka, Swiss,
El Salvador, Jordan, India,
Indonesia, Kazakhstan, Kenya,
Trinidad and Tobago, The Philippines,
Hongkong, Turkey, Columbia |
※ Countries mentioned above are changeable by the law of the domicile of foreign countries and the Social Security Agreement. |
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What is the contributions rate? |
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For Workplace based Insured Persons, the insured persons and their employers should each make contributions amounting to 4.5% of the standard monthly income based on their earned income (for the employer of a non-corporate workplace, based on income gained from wholesale, retail, manufacturing and other businesses)(Article 75.1 of the National Pension Act).
The Individually Insured Persons should make contributions amounting to 9% of the standard monthly income based on the income that they report.(Article 75.1 of the National Pension Act)
※ There is no discrimination in terms of the contributions rate between foreigners and Koreans. The payment should be made no later than the 10th day of the following month. If the 10th day is a holiday or a Saturday, however, the deadline will be extended automatically to the following business day. |
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Are foreigners compulsorily covered under the NPS? |
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Foreigners who are aged between 18 and 60 and who are residing and working in Korea, regardless of their nationality, should be covered under the NPS. Foreigners whose countries do not cover Korean nationals, however, are excluded from the coverage of NPS.(Article 102.1 of the National Pension Act)
Despite the above provisions, if there are relevant provisions under the Social Security Agreement between Korea and any foreign countries, those provisions will be applied. (Article 102-2 of the National Pension Act) |
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What is the Korean National Pension Scheme? |
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The National Pension Scheme is a social security system implemented by the government to contribute to people's stable life by collecting contributions and paying pension benefits for the insured people or their dependents to prepare for retirement or unexpected risks such as disability and death.
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Could you tell me about Korean Benefits? |
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If foreign insured persons are entitled to Old-age, Disability, or Survivor Pension, they will receive the same pension benefits as Koreans.
▶ Old-age Pension
- The Old-age Pension is paid monthly to those whose insured period is more than or equal to 10 years and aged over 60 for the rest of their lives. The pensionable age will increase by 1 year every five years starting from 2013 until it reaches 65 in 2033.
▶ Disability Pension
- The Disability Pension is paid to those with disability after treatment of diseases or injuries incurred during the insured period according to the degree of disability. Annuities will be paid to those with 1st, 2nd and 3rd degree disabilities and lump-sum benefits will be paid to those with 4th degree disabilities.
▶ Survivor Pension
- If currently insured persons or pensioners are deceased, the Survivor Pension will be paid every month to their surviving dependents whose livelihood was supported by the deceased person. | |
[Quotation from SEC] |
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Medical Insurance
