Those that plan on collecting your pension money after a long hard year of ESL, please listen up. Recently, it has come to our attention that tax offices in South Korea are encouraging public schools to under report your salary to compensate for the large taxes you don’t pay as a foreign national.

It goes like this, the school under reports your salary so your employer can pay less pension money. The minimum contribution to your pension is 4.5% of your earnings. If your employer writes that you earn less, they can pay less toward your pension. Without even realizing it you can be losing wads of cash each month, only to realize it at the end of your contract when you take out your pension. Many ESL teachers are now waking up to this ugly truth:

“The school’s administration said this is because the government is no longer considering your full income when taking out pension. This is a new rule that just went into affect in July and it’s affecting all teachers, Korean and foreign alike.”

“Many schools are trying this now and the pension office is backing them up. It’s because we get a 30% reduction in our taxable income (for tax purposes) so they are trying to apply it to everything – and nobody (the tax office) will tell them they can’t. There’s nothing in any legislation that says it applies across the board, but the standard reply from everyone is: “It’s Korean law.” Just ask them to show you and watch the stammering begin.”

“My school just realized they could use this 30 percent exemption for foreigners to their advantage and reduced my pension contributions. I called the pension office and they totally backed up my school on it. Apparently the pension office even sent out a document to my school instructing them to do this. Otherwise they wouldn’t have known about it. So basically now I pay 4.5 per cent on 70 per cent of my salary. ”

It seems like more and more English teachers in Korea are awakening to this disappointment everyday, even those that are very careful.

“No one told me that my pension was reduced. I’m one of those people who looks at every number on their pay slip though and nothing gets past me. The administration office told my co-teacher they were only going to explain it to me if I noticed, which of course I did. ”

How does one check his pension contributions?

Coincidently it has been made difficult for a foreigner to access this as the English page on the South Korean government pension site. It does not support a log in for English speakers. You will have to closely follow these steps to log in on the Korean site:

1). Go to http://www.npc.or.kr/ and look for the two blue boxes on the upper left side of the page. click on the left one.

2). On the new page, in the center you’ll see two white input boxes separated by a “-” … this is where you put in your ARC number

3). A pop-up should appear asking for your bank security password (the same thing that pops up when you do online banking). Put that in.

4). On the new page, on the top, look for the word: 개인전자민원 and scroll over it. a bunch of new links should drop down. there should be 3 columns

5). On the second column, click on the first link at the top and that will show you how much you have in your pension.

If all else fails you can make a trip to your local pension office and demand your pension statement. It would be a wise idea now to not place all your faith in the public education system anymore. These days they are no better than the horrid hagwons we’ve all heard about.