Under the National Pension Act, a lump-sum refund may only be paid to non-Korean nationals if they are nationals of countries with social security systems that pay corresponding contribution refunds to Korean nationals or if provided for by an agreement. All foreigners are eligible for a lump sum refund of Premiums paid, if they are from countries that have 'totalization agreements' with Korea, and if the foreigner leaves Korea or meet other eligibility requirements, (N.B. Australians do not) The United States and Canada have negotiated totalization agreements with Korea. The U.K. has negotiated a contribution only agreement. This means that a foreigner from the U.K. who is employed in Korea may benefit from the elimination of dual coverage, but will not get a lump sum refund. In Korea the refund is processed by the National Pension Corporation, in Canada by the Human Resources Development Org', in the U.S. by the Social Security Administration. If you submit your application in your home country, that agency will forward it to Korea. Many teachers do apply in Korea before leaving the country and arrange the refund as well. Countries such as New Zealand, Australia and South Africa have not signed any agreement therefore citizens from these countries cannot claim any refund or reciprocal payments after paying Korean Pension tax.

Question: I work for a university and have heard I don't get Severance Pay. Is this legal?

1. Are you in the National Pension Program, or a "Private Schools' Pension" program. Most (English version) teachers contracts do not indicate.

Severance and Pension are different. The pension programs have been in a state of flux the past 5 years as the government tries to pull many different programs into a single unified entity (for financial purposes, as many of the government-supported pensions were projecting insolvency).

Private secondary and tertiary education institutions are allowed to provide pensions outside of the government-supported programs (government programs mostly now unified in the "National Pension Program" - which is roughly similar to the US Social Security Insurance program in many respects). These private pensions are operated by insurance agencies, very similar to company pension programs back in North America. However, unlike in North America (so far as I know), in Koreaparticipation in a private pension program exempts the employee and employer from the National Pension Program. But there has to be a specific law on the books allowing that "type of employer" to offer a private pension program - such as is the case for private secondary and tertiary (middle/high and college/university) schools.

Private secondary/tertiary schools that provide pensions under the private schools pension law are exempt from the severance pay law.

Why? - I have three possible reasons
:
(1) university/colleges are politically very powerful, many school heads are politicians, (2) long-term employees in private pension programs will receive considerably more money under the private pension than they would under a government-supported pension (interest accrues from day one on both employee and employer payments, and it is available as a lump sum at time of employment termination, though employees do not receive employer's share prior to vesting (5 years as employee?)).
(3) from the earliest days of education in Korea, schools have had severe economic problems - and since teachers typically "worked" less than 45 weeks per year yet were paid for 52, there seemed no logic in paying them for 56 weeks (the 13th month). Hence, employees in both public and private primary/secondary/tertiary schools are exempt from the severance pay requirements.

Any contract (in Korean) that states that you get severance pay, the courts would order a school to pay. (If you can afford the lawyers fees!) There are several recent instances of this. However, English
versions of contracts are often poorly translated, and are NOT legally binding.

Having said that:

(1) Private language school "Hagwons" are not part of this exemption (one could argue that most expats in Korea work in "language centers" that aren't really any different from private profit-oriented language schools)

(2) Some univ/college do pay severance pay, because (a) they don't put their expat and part-time Korean teachers in the private pension, but pay the National Pension Program because of less
paperwork headaches (b) they consider it unlikely that the expats will ever vest in the private pension, and therefore not receive employer's share (I don't know if they get their employer's share back from the insurance agency, and don't care to consider all the possible official and unofficial issues that question might raise).

So, ask the school whether you are in the National Pension Program (gukmin yeon-geum) or the Private Schools' Pension (sarib hakgyo yeon-geum). And ask someone to read the Korean version of your contract to see if it mentions severance pay (dwaechi-geum).

Thanks to Rob Dickey JD for this.

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