Growing number of foreigners tap NPS loophole for lifetime pensions
A growing number of foreign residents in Korea who have contributed to the National Pension Service (NPS) for only short periods are using a loophole in the retroactive payment system to secure old-age pension benefits, with Chinese nationals accounting for a significant share of such cases, insiders at the state pension operator said Friday. The cases are fueling scrutiny of the scheme, which…
A growing number of foreign residents in Korea are exploiting a loophole in the National Pension Service's (NPS) retroactive payment system to secure lifetime pension benefits, with Chinese nationals comprising a significant portion of these cases, according to insiders at the state pension operator. This practice has raised concerns about the intended purpose of the scheme, which was initially designed to extend pension coverage to individuals with interrupted careers.
Current regulations stipulate that applicants must have contributed to the pension fund for a minimum of 10 years, or 120 months, to qualify for a regular monthly pension. However, the back-payment system permits those who were exempt from paying premiums for certain periods to make up those missed contributions through a lump sum payment, which is then added to their contribution history.
The scheme was implemented in 1999 to aid people in preserving their pension rights following career breaks due to unemployment, marriage, childbirth, and other reasons. Up to 119 months of unpaid contributions can be retroactively added to an individual's record via this method.
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- Growing number of foreigners tap NPS loophole for lifetime pensions koreatimes.co.kr
