Working for Just a Month and Paying 10 Years' Worth of Retroactive Premiums: Can Foreigners Also Receive Lifetime Pensions?

[Anchor]

The National Pension scheme involves paying a certain portion of your income every month and receiving it back later in life. However, there are cases where foreigners are able to receive national pensions for the rest of their lives after subscribing for just a single month.

Reporter Jo Yoon-ha looks into how this is possible.

[Reporter]

Foreigner A entered South Korea on a visiting employment visa and worked in the country for just one month.

During this period, A enrolled in the National Pension, and is now receiving an old-age pension, which is the national pension, every month.

Behind this lies the national pension "retroactive payment" system.

Originally, this system was designed for workers who lost their jobs or homemakers with career gaps.

To receive a national pension, one must pay insurance premiums for a minimum of 10 years, and the system allows people to fulfill this 10-year requirement later so they can receive their pensions.

Because this also applies to foreign workers employed in South Korea—excluding those here for studying or training purposes—it becomes possible to receive a pension by working for a month, quitting, and then making a lump-sum retroactive payment for the remaining 119 months.

Since the retroactive payment amount varies depending on salary, if the monthly wage for that single month is not high, there is a calculation that the money received in old age will be quite advantageous even after paying for 10 years.

This is why people are talking about foreign "pension financial tech."

As of 2024, foreign subscribers to the National Pension reached approximately 470,000, and the retroactive payment amounts they paid exceeded 5.8 billion won.

Looking at past statistics, Chinese nationals accounted for the largest share of foreigners applying for retroactive payments at 67.6%, followed by Americans at 13.7% and Canadians at 8.4%.

Of course, there are also cases where local citizens use the retroactive payment system to gain financial benefits.

There are also many foreign workers who pay their insurance premiums yet fail to receive their pensions.

However, as there are cases where the system is being exploited in ways contrary to its original intent, the Ministry of Health and Welfare stated that it is reviewing measures to improve the retroactive payment system.

(Video by Park Chun-bae | Design by Cho Soo-in)

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