Recently, Korea Asset Management Corporation (KAMCO) received a "poor (D)" grade in the public institution management evaluation, reigniting controversy over the aggregates personnel expense system for financial public institutions. After it became known that KAMCO got the lowest score on the relevant indicator for exceeding aggregates personnel expenses, other financial public institutions are urging reforms to the system.
According to the financial sector on the 1st, KAMCO was the only finance-related institution to receive a D grade in the "2025 public institution management performance evaluation." Employees at institutions that receive a D grade do not get any performance bonuses. In the previous year's evaluation, KAMCO received a "good (B)" grade.
KAMCO received low marks due to issues such as serious industrial accident occurrences and poor management of state-owned property for debt workout beneficiaries. In particular, it was reported to have received the lowest score in the aggregates personnel expense operations category. To address the accumulated issue of non-promotion among lower ranks, KAMCO drew up its own resolution plan and received approval from the Ministry of Strategy and Finance, but the union said the evaluation panel gave a low score in that category, claiming the plan caused KAMCO to exceed aggregates personnel expenses.
In response, the Financial Industry Union, the higher-level body, pushed back. In a statement, the union said, "What further fuels the distorted management evaluation is the aggregates personnel expense system," adding, "The Financial Industry Union can no longer overlook the repeated abnormal management evaluations. We strongly call for a sweeping overhaul of the aggregates personnel expense system and the management evaluation system."
The aggregates personnel expense system is a policy in which the government sets a ceiling on total personnel expenses for each public institution, and within that limit, base pay, various allowances, and welfare expenses are managed. The conflict over the aggregates personnel expense system at financial public institutions escalated with the issue of unpaid employee allowances at Industrial Bank of Korea (IBK). The IBK union said the company failed to pay 83 billion won in allowances, citing the aggregates personnel expense system, and staged a general strike last year. The dispute subsided after President Lee Jae-myung ordered payment and IBK decided to pay the unpaid allowances.
However, the conflict is flaring again after KAMCO's downgrade in this management evaluation. Korea Development Bank and Export-Import Bank of Korea decided to put improvements to the aggregates personnel expense system on the agenda in this round of industrywide talks in the financial sector. The Financial Supervisory Service union also recently put the aggregates personnel expense issue on the official agenda at a labor-management council. The union says workloads continue to rise, but fair compensation is not being made due to the aggregates personnel expense system.
Inside and outside financial public institutions, there are expectations that a plan to improve the aggregates personnel expense system will come out within the year. The government is said to be weighing issues such as equity among public institutions and extending the retirement age.
A source at a policy bank said, "Given that the government has not presented a suitable plan despite the president's instructions at the start of the year, it seems it will take time to prepare countermeasures. We understand the union is continuing to persuade the government and the National Assembly with the goal of preparing system improvements within the year."