More credit card companies in South Korea are adopting the so-called wage peak system this year to keep in line with related government policies, industry sources said on Wednesday.
Samsung Card, Hyundai Card and Lotte Card have begun implementing the wage peak system this year after KB Kookmin Card became the first credit card firm in the country to adopt it.
KEB Hana Card is also planning to adopt the system within this year.
The law calls for public companies and big businesses with 300 or more employees to extend the retirement age to 60 or above starting this year. Implementation at other smaller firms is slated for 2017.
The peak wage system guarantees employees’ job security until their retirement age in exchange for reduced salaries. The government has been pushing for the system based on calculations that the money saved this way can be used to hire new employees.
Under the system, paychecks for Samsung and Hyundai employees will be cut by 10 percent every year after they reach 56 years of age. As for Lotte Card, workers who turn 57 will receive two years worth of their salaries over a period of three years, according to company officials.
(khnews@heraldcorp.com)