[1mm Geumyung Talk] Will the '800 Million Receipt' Record Be Broken... Banks Start Voluntary Retirement Plans

[Asia Economy Reporter Buaeri] Banks are also successively implementing voluntary retirement programs. Unlike in the past, there is a growing atmosphere in the banking sector where quite a few employees want to opt for voluntary retirement. Moreover, since major commercial banks recorded record-high earnings this year, expectations for voluntary retirement benefits have also increased. Some banks are even offering 'extra bonuses' compared to previous years.

According to the financial sector on the 16th, NongHyup Bank conducted voluntary retirement applications last month. The target group includes employees aged 40 or older who have worked for more than 10 years at all ranks. The special retirement allowance ranges from 20 to 39 months of the average monthly wage at the time of retirement. Considering that the highest standard last year was 28 months, the retirement benefit amount has expanded by as much as 11 months.

Sh Suhyup Bank also accepted voluntary retirement applications around the same time. For managerial positions at branch manager level or higher, those with more than 18 years of service are eligible, and for staff such as section chiefs, those with more than 15 years of service are eligible. The special retirement allowance can be up to 37 months’ salary.

Major commercial banks such as KB Kookmin, Shinhan, Woori, and Hana Bank are also expected to carry out voluntary retirement from mid-December to early next year based on labor-management agreements, although nothing has been finalized yet. In the past, there was a strong negative perception of voluntary retirement, but recently, due to high special retirement allowances and other factors, perceptions have changed significantly, according to banking officials. A representative from a commercial bank said, "Nowadays, there are even employees waiting for voluntary retirement, so it has become like an annual event," adding, "If voluntary retirement is not conducted, there could even be backlash."

In fact, last year, voluntary retirees from the four major banks were among the top 5 earners at each bank. At Shinhan Bank, five retired employees received between 832 million KRW and 876 million KRW, which was higher than the salary of Shinhan Bank President Jin Ok-dong (825 million KRW). At Hana Bank, the five retirees’ earnings ranged from 751 million KRW to 805 million KRW, placing them in the top 5 as well.

At Woori Bank, four of the top 5 earners were voluntary retirees. Their total compensation ranged from 797 million KRW to 839 million KRW. At KB Kookmin Bank, two of the top 5 earners were voluntary retirees, receiving 795 million KRW and 833 million KRW respectively. However, these amounts include statutory retirement pay, special retirement pay, and earned income combined.

Another commercial bank official said, "In the past, labor unions tended to block (voluntary retirement), but nowadays, it seems that agreements are reached smoothly reflecting employees’ demands," adding, "Since banks performed well this time, expectations for retirement benefits are also higher."