‘Hundreds of millions of won consolation money’ voluntary bank retirement… ‘Bitter’ government bank [경제 블로그]

Promising Pensions Office
Most peak wage system
Insight into internal staff backlog

Recently, as the four major commercial banks are receiving requests for voluntary retirement, employees of state-owned banks such as the Industrial Bank of Korea, Korea Development Bank and Export-Import Bank of Korea are saddened.

It’s the same bank, but unlike commercial banks, which receive hundreds of millions of won in compensation for voluntary retirement, government-owned banks can’t help but feel a sense of relative deprivation because they don’t receive such compensation.

According to the banking sector on the 4th, up to 3,000 employees of the four major banks, KB Kookmin, Shinhan, Woori and Hana Bank, are expected to apply for voluntary retirement later this month. Large-scale voluntary retirement is possible because the bank pays a generous fee.

Hana Bank receives an average salary of 24 to 36 months depending on position and age. Students born between 1968 and 1970 are also guaranteed university fees, medical expenses and benefits for re-employment and job change. In 2021, bank employees received an ERP of more than 800 million won also appeared, which became a hot topic.

However, government-owned banks cannot make such an ERP payment. In 2015, after the Audit and Control Board pointed out that the amount of ERP payments by government-run banks was excessive, regulations were tightened, such as setting 45% of the annual salary as the standard salary. From the following year, the voluntary retirement system became practically useless.

In the case of Industrial Bank of Korea, there is a semi-retirement age system, but most of them choose the peak salary system due to low severance pay.

The problem is that, as a result, the backlog of internal staff is getting worse. In the case of the Industrial Bank of Korea, as of June last year, the number of employees under the peak wage system was 997, accounting for 7.3 percent of the total number of employees.

An official at a government-owned bank said, “Commercial banks are cutting staff to increase efficiency within the organization during the digital transformation, but the national bank’s organization is ageing.” Labor and government-owned banks’ management have called on the government to improve the early retirement system, but this has not been done for several years.

Related content was also mentioned at the inauguration ceremony of the new IBK chairman Kim Seong-tae on the 3rd. Chairman Kim reserved his words, saying, “I will continue to consult (with the Ministry of Finance and Economy ) because it’s not something that can be done alone”. CEO Kim is said to have a heavier burden on his shoulders as he is expected to receive a new insider job for the first time in three years.

Reporter Song Soo-yeon