South Korea to Block Foreigners from Using National Pension Top-Up Loophole

South Korea plans to tighten a National Pension rule after cases emerged of foreigners using a retroactive payment provision to build eligibility for lifelong pension benefits.

Under the current system, people who missed contributions because of leave, unemployment or a suspended business can pay up to 119 months of premiums retroactively. The payments extend their contribution period and can help them meet pension eligibility requirements, earning the practice the nickname “pension investment.”

The controversy centers on foreign workers who enrolled in the system after working in South Korea for only a month, then effectively returned to their home countries and paid contributions for as many as 119 months. The Dong-A Ilbo reported that applications by foreigners rose from 530 in 2023 to 1,517 last year.

The Ministry of Health and Welfare said on the 1st that it would revise National Pension Service guidelines. Under the revised rules, foreigners will be able to make retroactive contributions only for periods when they actually lived in South Korea.