SEOUL, Oct. 22 (Korea Bizwire) – The proportion of public institutions that have adopted the government’s salary peak system initiative to create more jobs for young people now exceeds 60 percent.
The government sent a warning message to unions at public organizations that are asking for a retirement age extension without adopting the salary peak system.
According to the Ministry of Strategy and Finance, among the 316 public institutions in Korea, 191 organizations (60.4 percent) have finalized their adoption of the salary peak system. Considering that a number of organizations will hold meetings with their board of directors to adopt the system within the next month, the number is expected to soon increase to 225 (71.2 percent).
Authorities are relieved that the salary peak system is settling down quicker than they expected. Officials note that 86.7 percent of state-owned companies, 82.6 percent of quasi-government agencies and 47 percent of the other public institutions have completed a transition to the salary peak system.
The average salary adjustment period has turned out to be 2.6 years. Starting from the adoption of the salary peak system, average wage rates come in at 81.9 percent for the first year, 75.2 percent for the second year and 68.8 percent for the third year.
Authorities say that the disadvantages some individuals will experience after the adoption of the salary peak system will for the most part be balanced through coexistent employment funds and tax benefits. In addition, there will be personnel expenses to spare.
As the government has requested that public institutions that have not yet adopted the salary peak system finalize the adoption during the month of October, it has also been suggested that institutions show employees how their pay checks will be adjusted, and explain the changes.
By M.H.Lee (email@example.com)