The Gyeongsangnam-do Hampyeong NongHyup Joint Business Corporation has hired 42 public seasonal workers this year. Their monthly salary is approximately 2.1 million won before tax, and the monthly national pension fee is about 200,000 won. Seasonal workers, who stay for a maximum of 8 months during the busy farming season, will not be spending their retirement in Korea, but among foreigners residing in the country who are between 18 and 60 years old and have income, they are subject to national pension enrollment, resulting in both the foreigners and Hampyeong NongHyup each contributing about 100,000 won.
To receive the national pension, one must be enrolled for at least 10 years and reach the pension eligibility age. Foreign workers who cannot pay for 10 years can apply for a refund lump sum, but foreign workers in Hampyeong County cannot receive a refund lump sum either. Their nationality is Vietnamese, and Vietnam is not a country eligible for refund lump sums. Approximately 1.6 million won accumulates for each foreign worker over 8 months, resulting in a total of 67.2 million won in national pension contributions from Hampyeong County alone this year.
A Hampyeong NongHyup official noted, "The approximately 30 million won that the local NongHyup has to pay significantly impacts the local NongHyup's finances," adding, "Foreigners are forced to pay, but they really dislike it because they cannot understand the reason."
Many foreign workers working in Korea are found to be unable to retrieve their national pension contributions when returning to their home countries. This is due to the mandatory enrollment regulations and the limited qualifications for refunds. The money that these workers contribute and do not get back is used for the National Pension Fund, and its size is estimated to be in the billions of won annually.
According to the National Pension Service (NPS), there were 453,031 foreign employees enrolled in the national pension last year. This is an increase of 48.5% (147,900 people) compared to four years ago in 2020, when there were 305,131. Last year, the number of foreigners who received national pension benefits accounted for 3.6% of total enrollees, with 16,138 people receiving the benefits and 40,104 receiving it as a refund lump sum.
According to Article 126 of the National Pension Act, foreign residents in the country are also subject to national pension enrollment. Foreigners under the Employment Permit System (E-9) predominantly employed in the manufacturing sector, seasonal workers (E-8) who work for a maximum of 8 months in rural areas, and foreign crew members on fishing vessels (E-10) are among those eligible for enrollment.
To receive the pension, one must pay for at least 10 years, which most do not meet. Foreign workers under the Employment Permit System and foreign crew members can stay in Korea for a minimum of 3 years and a maximum of 9 years and 8 months, while the stay period for seasonal workers is a maximum of 8 months.
If they cannot receive the pension, they can receive it through the refund lump sum system, but only workers from countries that have signed a social security agreement with Korea or those eligible for refunds to Koreans can receive it. Currently, the eligible countries include Thailand, the Philippines, Cambodia, and a total of 49 countries, but workers from China, Vietnam, Laos, and Mongolia, who work extensively in Korea, cannot receive it. Only subscribers who have paid for over a year can apply for a refund lump sum in Thailand, so seasonal workers, who can only stay for a maximum of 8 months, pay into the national pension and cannot receive it.
The National Pension Service (NPS) has allowed foreign workers with E-8, E-9, and H-2 visas to receive a refund lump sum, even if they do not belong to the 49 eligible countries, but seasonal workers are excluded from this. In response, the 'Public Seasonal Worker Operating NongHyup Council' conveyed their request for a policy improvement to exclude seasonal workers from mandatory enrollment in national pension and other social insurance to the Ministry of Agriculture, Food and Rural Affairs last May.
Last year, a total of 57,247 foreigners entered the country as seasonal workers, of which 2,055 were public seasonal workers with a mandatory national pension payment obligation. The National Pension Service (NPS) does not disclose how many of the public seasonal workers paying into the national pension do not receive a refund lump sum, but considering the proportions from Vietnam, Laos, and Mongolia, it is estimated that about 75% will not be able to retrieve their contributions. Assuming that these workers and their employers contribute 200,000 won per month, the annual total would be about 3.7 billion won.
Some employers and foreign workers who deem the current system unjust are refusing to pay into the national pension. One foreign vessel employer stated, "Legally, I have to pay into the national pension, but the foreigners I have hired now are not eligible to receive it, so they are not paying."
Park Jin-kyu, a researcher at the Fisheries Economic Research Institute, said, "Many foreigners who are subject to national pension payment do not pay. It seems that the National Pension Service (NPS) does not impose any special sanctions for not paying. If they were to catch everyone, there would be a lot of them detected." It is such that only foreign workers and their employers who contribute to the national pension, knowing they won't get it back, suffer disadvantages.
The national pension contributions that foreign workers pay but cannot retrieve are used as fund resources. Although the number of foreign national pension subscribers has increased by nearly 150,000 from 2020 to last year, the number of refund lump sum recipients during the same period only increased from 34,056 to 40,094, an increase of only 7,038 people, indicating that the unclaimed national pension is likely to exceed several billion won.
While criticisms regarding the national pension system for foreign workers persist, the National Pension Service (NPS) stated, "We have no official position on this." An official from the Ministry of Health and Welfare noted, "We are working with the Ministry of Foreign Affairs and the National Pension Service (NPS) to quickly establish a social security agreement to expand the countries eligible for refund lump sums."
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