HOME > National Pension > National Pension Scheme > Foreigners and Lump-sum Refund
Foreigners aged between 18 and 59 working and residing in Korea are subject to the compulsory coverage of the national pension scheme, the same as Korean nationals. If he/she is working in the workplace covered under the scheme, he/she shall mandatorily be a workplace-based insured person and in other cases, an individually insured person.
At the time of the introduction of the Scheme, foreigners were not mandatorily covered. Only foreigners working in a workplace covered under the Scheme could be covered as a Workplace based insured person by submitting an application.
From August 1995, foreigners working at a workplace with 5 or more full-time employees were included in the mandatory coverage. People working at a workplace with less than 5 employees, including the self-employed, were also included in the mandatory coverage from April 1999. Accordingly, at present, foreigners aged from 18 to less than 60 who reside and work in Korea must be, in principle, covered under the National Pension Scheme.
However, foreigners falling under any of the following items are excluded from the coverage.
Who is excluded from Coverage?
① Those nationals whose country does not mandatorily cover Korean citizens under its pension scheme.
=> Under this rule, only the nationals from the following 19 specified countries ※ do not have to enroll and pay the NPS contributions.
※ the Republic of South Africa, Nepal, Maldives, Myanmar, Bangladesh, Vietnam, Saudi Arabia,
Armenia, Ethiopia, Iran, Egypt, Tonga, Pakistan, Fiji, Cambodia, Singapore, Belarus, East Timor, Georgia
② Foreigners who are not registered under the Immigration Act, or to whom the forced deportation order
has been issued under the same Act, or who are staying in Korea without being permitted to extend their
term of stay.
③ Among the registered foreigners under the Immigration Act, those whose stay status falls under any of the
followings; culture & art, studying abroad, industrial training, general training, religion, visiting & living
together and others.
④ People excluded from the mandatory coverage of National Pension Scheme, by the social security
agreement.
Acquisition & Loss of Insured Status has to be reported- Who must report facts regarding acquisition & loss of insured status?
ㆍ For Foreign Workplace-based Insured Person: Employer of the workplace
ㆍ For Foreign Individually Insured Person: The insured person However, if the person is unable to report for a particular reason, the spouse or other family members may report on behalf of the insured person.
- Due Dates for Reporting
ㆍ Foreign Workplace-based Insured Person: By 15th of the month following the month which the relevant facts occur
Example) If he/she starts to work in February, he/she must make a report by March 15.
ㆍ Foreign Individually Insured Person: By 15th of the month following the month which includes the day on which acquisition & loss of the insured status occurs
Foreign insured persons under the national pension scheme are treated equally as a Korean national insured person.
If a foreigner becomes eligible to receive an old-age, survivor or disability pension, he/she can be paid any of pension benefits under the Korean National Pension Act (refer to each section on types of pension)
For example, there is no discrimination in terms of the benefit amount and remitting benefits abroad, etc. But there is a certain distinction in regarding a lump-sum refund. In principle, a lump-sum refund is not paid to foreigners leaving Korea after having been covered under the scheme.
But, in the case of foreigners falling under any of the following conditions, a lump-sum refund will be paid.① In cases where a foreigner whose home country grants Koreans a benefit corresponding to a lump-sum refund under the National Pension Scheme.
=> Under this rule, only the nationals from the following 28 countries※ may receive the Korean lump-sum refund. Please refer to Article 126 of the National Pension Act and Article 113 of the Enforcement Decree of the National Pension Act.
② In cases where a foreigner whose home country has concluded a social security agreement with Korea regarding the payment of the lump-sum refund※ As of January 2009, Canada, The U.S., Germany, Hungary, France, Australia, Czech Republic, Belgium
③ Regardless of nationality, in cases where a foreigner, who has been covered under the national pension scheme with a stay visa of E-8 (Employment for Training), E-9 (Non-professional Employment), or H-2 (Visiting Employment) returns to his/her home country
Countries whose Nationals are Granted a Lump-sum Refund (as of March, 2010)Regardless of Nationality E-8 (Employment for Training), E-9 (Non-professional Employment), H-2 (Visiting Employment) Under the Social Security
Agreement (11 countries)Germany, US, Canada, Hungary, France, Australia, Czech Republic, Belgium, Poland, Slovakia, Bulgaria Minimum
Insured
PeriodOver 6 months Belize Over 1 year
(9 countries)Grenada, Barbados, Zimbabwe, Cameroon, Congo, Thailand, Togo, Jordan, Saint Vincent and Grenadine Over 2 years Venezuela None
(18 countries)Ghana, Malaysia, Vanuatu, Bermuda, Sudan, Sri Lanka, Switzerland, El Salvador, India, Indonesia, Kazakhstan, Kenya, Colombia, Trinidad and Tobago, Turkey, Philippines, Hong Kong, Tunisia ※ If a foreigner applies for a lump-sum refund because he/she is going to return to his/her home country, the lump-sum refund will be paid as long as the NPS can confirm that the person has left Korea. However, if he/she submits the required materials such as airplane tickets verifying his/her departure within one month, he/she will be able to apply for the refund before leaving Korea.Benefits
Like Korean nationals, a foreign national working and residing in Korea also receives, a lump-sum refund, of which the total amount of the contributions that he/she has paid during his/her insured period includes interest on the sum during the same period, and interest earned until the day on which the person becomes eligible to receive his/her pension benefits.
※ The interest rate that is applied to the benefits is determined by taking an average from nation wide banking institutions established under the Banking Act, announced January 1st of each year.
※ Example) Interest rate of time deposit with a maturity of three years for 2009 - 4.0%
Interest rate of time deposit with a maturity of one year for 2009 - 3.7%
(If an applicant is a national from a country without a social security agreement with Korea)
Applying before departing Korea (If the applicant is in Korea)
The applicant should visit a regional office, having the following documents ready
| <Required documents> - An Application for Lump-sum Refund (This form is available at any regional office.) (the date of departure has to be in less than a month from the date of the claim) |
Applying for a Lump-sum Refund if outside of Korea
An application can be made by an agent or mail.
(1) In the case of an application by mail in a foreign country
| <Required documents> - An application for Lump-sum Refund (it must be notarized from a notary's agency in the country where the applicant resides and be attested by the Korean embassy). - A copy of bankbook or similar (registered in the applicant's name) ※ If the applicant applies for overseas remittance, an application for overseas remittance and a bank statement or void check which shows his/her name and account number are required. - A copy of his/her passport |
(2) In the case of an application by agent in a foreign country
In case that an applicant resides in a foreign country, he/she may apply for the benefit by notarizing his/her letter of attorney in the country where he/she resides and has it attested by the Korean embassy.
| <Required documents> - A letter of attorney (it must be notarized from a notary's agency in the country where the applicant resides and be attested by the Korean embassy). ※ An applicant should specify that he/she intends the agent in Korea to receive his/her lump-sum refund on behalf of him/her. In this case the applicant must provide a signed or stamped letter of attorney containing the agent's full name, address, etc. ※ An agent living in Korea who has received the letter of attorney should get their Korean-translated texts notarized again so the letter's contents can be generally identified.- A copy of the applicant's passport - An application for Lump-sum Refund ※ An applicant must fill out the "Application by Agent" section in the "Application for Lump-sum Refund" form and then notarize it in a notary's agency of the country where the applicant resides and attest it in the Korean consulate or embassy. If the applicant's letter of attorney is tested by a public notary in the country where he/she resides or a Korean consulate or embassy, the "Application by Agent" is not necessary. - A copy of applicant's ID card (public documents issued by the government of the applicant's home country including a passport, social security card or other forms of identification) - applicant's bank book (it must be notarized from a notary's agency of the country where the applicant resides and be attested by the Korean embassy) |
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(3) In the case of application under the MOU through a social insurance institution of the beneficiary's country
○ In order to improve efficiently, convenience and accuracy in paying benefits, a foreign national who has returned to his/her home country can apply for a lump-sum refund through a social insurance institution of his/her country with the same procedure in Korea.
- Persons able to use this method : A national returning his/her home country whose country has concluded the MOU with Korea
- Applicable benefits using this method : Lump-sum Refund, Lump-sum Death Payment or unpaid benefits of the two.
- The Institution receiving and sending an application for pension benefits: Social Insurance Institution of the beneficiary's home country
- The Institution paying benefits and making a notice of it: Korean National Pension Service
○ Current Countries which have concluded the MOU with Korea
- Mongolia (signed on November 15, 2007, entered into force on November 26, 2007)
- The number of country concluding the MOU will be expanded
- - An Application for Korean Benefits
※ A national who is from a country which has a social security agreement with Korea must apply for the benefits using an "Application for Korean Benefits under the Social Security Agreement between Korea and his/her country" form.
- An Application for Overseas Remittance
