"This Is the Peak... Leaving with 1 Billion Won": Voluntary Retirement, a Different Scale

Voluntary Retirements Remain Above 2,000
High Severance Packages Persist Despite Reduced Benefits

From the end of last year to the beginning of this year, the number of employees at the five major domestic banks who opted for voluntary retirement exceeded 2,000. The scale of voluntary retirements has remained around 2,000 people annually in recent years, continuing the trend of "regular restructuring in the banking sector."

The scale of voluntary retirements at commercial banks has remained around 2,000 people annually in recent years, continuing the trend of "regular restructuring in the banking sector."

According to the banking sector on February 1, a total of 2,364 employees actually left their jobs after applying for voluntary retirement at KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank from the end of last year to the beginning of this year. During the same period last year, 2,324 people retired, showing a similar level this year.

By bank, Shinhan Bank had the highest number of voluntary retirements at 669. This is an increase of more than 100 people compared to January of last year (541 people), marking the largest scale since 2020. Nonghyup Bank also saw an increase, with 443 employees retiring after applying for voluntary retirement in December last year, up from 391 the previous year.

At Kookmin Bank, Hana Bank, and Woori Bank, 549, 283, and 420 employees, respectively, left through voluntary retirement, which is a decrease compared to the previous year. In January of last year, Kookmin Bank had 647, Hana Bank had 316, and Woori Bank had 429 retirees.

Within the banking sector, there is a growing perception that "it will be difficult to further improve the conditions for voluntary retirement," leading to an entrenched structure where thousands of employees choose to retire each year. The number of voluntary retirements at the five major banks dropped from around 2,200 in 2022-2023 to around 1,800 in 2024 as severance pay decreased, but recovered to around 2,000 last year and this year.

Currently, Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Bank pay up to 31 months’ salary as special severance pay, reflecting factors such as years of service, while Nonghyup Bank offers up to 28 months. This is a reduction compared to 2023, when up to 35-36 months’ salary was paid.

Banks are believed to have reduced the amount of severance pay in response to public criticism over paying large severance packages funded by interest income. However, it is estimated that retirees still receive substantial sums. According to management reports from the banks, as of 2024, the average voluntary retirement payment per person at the five major banks is in the mid-300 million won range.

By bank, Kookmin Bank and Hana Bank had the highest average at 370 million won, followed by Woori Bank at about 340 million won, Nonghyup Bank at about 320 million won, and Shinhan Bank at about 310 million won. When adding the standard severance pay, which is typically around 100 million won, the actual amount received is estimated to reach an average of 400 to 500 million won.

Notably, the semi-annual report for the first half of last year confirmed cases where severance pay exceeded 1 billion won. One of the top-paid retirees at Hana Bank received 1.06 billion won, and other top retirees also received severance packages in the 900 million won range. At Kookmin Bank, Shinhan Bank, and Woori Bank, the severance pay for top-paid retirees was recorded at between 700 and 900 million won.