Working for Just One Month to Receive a Lifetime Pension? Foreign Nationals and the National Pension "Investment Hack"

[Anchor]

The national pension is a system where people pay a certain portion of their income every month and receive it back later in life. However, cases are emerging where foreign nationals join the national pension for just a single month and receive the pension for the rest of their lives.

Reporter Jo Yoon-ha takes a closer look at how this is possible.

[Reporter]

A foreign national identified as A entered South Korea on a visiting employment visa and worked in the country for exactly one month.

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

Behind this phenomenon is the national pension "retroactive payment" system.

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

To be eligible to receive the national pension, individuals must pay premiums for a minimum of 10 years. The system allows people to make up for missing periods later so they can secure their pension once they fulfill the 10-year requirement.

Because this applies to foreign workers employed in South Korea, excluding those who came for studying or training purposes, an individual can work for just a month, quit, and make a lump-sum retroactive payment for 119 months to become eligible for the pension.

Since the amount of retroactive payment varies depending on one's salary, the calculation is that if a person's monthly wage was low, the money they receive in retirement will far outweigh the cost of paying for 10 years all at once.

This is why people are calling it a foreign national "pension investment hack."

As of 2024, foreign subscribers to the national pension reached approximately 470,000, and the total amount of retroactive payments they made exceeded 5.8 billion won.

Looking at past statistics, Chinese nationals accounted for the largest share of foreign applicants for retroactive payments at 67.6%, followed by U.S. nationals at 13.7% and Canadian nationals at 8.4%.

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

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

However, as some cases are exploiting the system in ways contrary to its original purpose, the Ministry of Health and Welfare stated that it is reviewing measures to improve the retroactive payment system.

Video by Park Choon-bae | Design by Cho Soo-in
※ Please note: This article was translated by AI and may contain errors.