Bitter Cold and Cutting Winds... 2,000 Bank Employees Pack Up (Comprehensive)

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

[Asia Economy Reporter Park Sun-mi] Four banks including Shinhan, Hana, Woori, and NH Nonghyup Bank have finalized the number of voluntary retirees, with a total of about 1,700 people preparing to pack up or leave from the end of 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 four major 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 3 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 early this year.

Woori Bank and Shinhan Bank to Process Retirements of Eligible Employees Within This Month

Woori Bank has finalized the number of voluntary retirees at 468 and will process their retirements within this month.

The main target for voluntary retirement was those aged 54 (born in 1966), with 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 gift certificates. The application target was expanded up to the level of managers born in 1974, increasing the number of voluntary retirees this time by 142 from 326 last year.

Shinhan Bank will finalize the voluntary retirees and process their retirements 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 according to 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 change support funds. Separately, 226 employees born in 1965 and 1966 also took special retirement, receiving average salaries of 25 months and 31 months respectively, along with children's tuition fees, medical expenses, and reemployment and career change support funds.

NH Nonghyup Bank also had 496 voluntary retirees last month. Just a year ago, the voluntary retirement system paid a uniform special retirement allowance of 28 months' average monthly salary to employees aged 56 and 20 months 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 labor-management conditions regarding voluntary retirement.

Although a broad agreement has been reached between labor and management 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 rapid transition to non-face-to-face banking due to the spread of COVID-19, which has accelerated the trend of branch closures. After the five major commercial banks closed 216 branches last year, four major banks including 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, due to the special situation of the COVID-19 spread, it seems that the number of applicants has increased."