(Seoul=Yonhap Infomax) Ha Rin Song—The basis month for calculating the National Pension Service (NPS) lump-sum contribution rate will be changed to the month in which the payment deadline falls.


The Ministry of Health and Welfare announced on the 25th that, following the implementation of a partial amendment to the National Pension Act, the calculation standard for the NPS lump-sum contribution rate will shift from "the month of application" to "the month of the payment deadline."


The NPS lump-sum payment system allows subscribers to retroactively pay pension contributions for periods—up to a maximum of 119 months—during which they were unable to contribute due to reasons such as leave of absence or unemployment.


This amendment was introduced to address fairness between those making retroactive payments and regular monthly contributors, as the NPS contribution rate and income replacement rate are set to increase from January next year.


Previously, applicants for lump-sum contributions in December would have been subject to this year's contribution rate of 9%, while the income replacement rate applied to pension benefits would be 43% as per next year's standard. However, under the revised law, both the contribution rate and income replacement rate will be applied at next year's levels—9.5% and 43%, respectively.


The Ministry of Health and Welfare stated, "With the implementation of the amended law, the issue of lump-sum contributors being advantaged over regular monthly payers will be resolved."


hrsong@yna.co.kr


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