In Midwinter, 2,000 Bank Employees Prepare for Voluntary Retirement

Shinhan, Hana, Woori, and NongHyup Banks to Offer Voluntary Retirement to 1,700 Employees at Year-End and New Year
Kookmin Bank in Labor-Management Negotiations

[Asia Economy Reporter Park Sun-mi] Shinhan, Hana, Woori, and NH Nonghyup Bank have confirmed the number of voluntary retirees, with a total of around 1,700 employees preparing to pack up or leave from late last year to early this year. If the final announcement is confirmed for Kookmin Bank, which is currently in labor-management negotiations, the number of employees leaving the banks through voluntary retirement is expected to exceed 2,000.

According to the banking sector on the 18th, the number of voluntary retirees at the four major commercial banks, excluding Kookmin Bank, reached 1,700 at the turn of the year. The special retirement pay provided to voluntary retirees by the banks is at a similar level to last year, at 'up to three years' salary + α,' but the number of applicants increased as many banks expanded the eligible age range for voluntary retirement applications at the end of last year and the beginning of this year.

Woori Bank confirmed 468 voluntary retirees and will process their retirement within this month.

The main target for voluntary retirement was employees aged 54 (born in 1966), who had the highest number of applicants. The bank also gave employees aged 55, who have already entered the wage peak system, another opportunity to apply for voluntary retirement this year. Employees born in 1965 receive 24 months' salary, and those born from 1966 receive 36 months' salary. In addition, separate support is provided for children's tuition fees (up to 28 million KRW per child), health check-up vouchers, reemployment support funds, and travel vouchers. With the application eligibility expanded to managerial-level employees born in 1974, the number of voluntary retirees this time increased by 142 from 326 last year.

Shinhan Bank will finalize the voluntary retirees and process their retirement in line with the regular personnel reshuffle scheduled for the 26th. During the application period from the 4th to the 14th of this month, about 220 people submitted applications. Shinhan Bank decided to provide up to 36 months' salary, children's tuition fees, health check-up expenses, and startup support funds depending on the birth year.

Hana Bank had 285 general employees aged 40 or older with more than 15 years of service leave the company last month through the 'quasi-retirement special retirement' system, receiving up to 36 months' salary, children's tuition fees (up to 20 million KRW per child), medical expenses, and reemployment and career transition support funds. Separately, 226 employees born in 1965 and 1966 also took special retirement, receiving an average of 25 months' and 31 months' salary respectively, along with children's tuition fees, medical expenses, and reemployment and career transition support funds.

NH Nonghyup Bank also had 496 voluntary retirees last month. Just a year ago, the voluntary retirement system paid a uniform amount of 28 months' average monthly salary to employees aged 56 and above, and 20 months' salary to employees aged 40 or older with more than 10 years of service. This time, the eligible age range expanded to those born in 1980, and the special retirement pay increased to a maximum of 39 months' average monthly salary, resulting in more than 140 additional applicants.

Kookmin Bank in labor-management negotiations... 462 voluntary retirees last year

Kookmin Bank is currently negotiating between labor and management over the conditions for voluntary retirement.

Although a broad agreement has been reached to expand the eligible age range for voluntary retirement applications, negotiations are ongoing over the special retirement pay. Last year, Kookmin Bank paid up to 35 months' average monthly salary as special retirement pay to voluntary retirees, with 462 applicants. If the number of voluntary retirees at Kookmin Bank this year is similar to last year, the total number of voluntary retirees at the five major banks at the turn of the year will exceed 2,000.

The increase in voluntary retirees in the banking sector is influenced by the accelerated shift to non-face-to-face banking due to the spread of COVID-19, which has intensified the trend of branch closures. After the five major commercial banks closed 216 branches last year, four major banks?Kookmin, Shinhan, Hana, and Woori?plan to reduce 26 branches between January and February this year, accelerating the pace of branch closures.

A banking official said, "Since the voluntary retirement system has become regularized and the conditions such as special retirement pay for retirees are not bad, expanding the eligible age group tends to increase the number of applicants. Especially this year, the special situation of the COVID-19 spread seems to have increased the number of applicants."