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  • ohitsgary
  • Veteran

    • 239

    • January 06, 2013, 07:28:15 am
    • London
Separate severance pay bank account?
« on: May 04, 2015, 12:18:52 pm »
I asked my school about severance pay, as I will leave this year. They told me that I need to open a new bank account, called IRP (Individual Retirement Pension). If I set this up, then they're able to send the severance to that account. For some reason, they can't send the money to my regular account. Is this a normal procedure and can I just open an IRP account from any bank?
« Last Edit: May 04, 2015, 01:07:07 pm by ohitsgary »


  • Porksta
  • Veteran

    • 117

    • October 08, 2011, 09:31:27 pm
Re: Separate severance pay bank account?
« Reply #1 on: May 04, 2015, 01:34:51 pm »
I have never heard of such a thing, and no it is not required.  Just have them include it with your final salary.


  • skippy
  • Expert Waygook

    • 873

    • January 12, 2011, 04:08:17 pm
    • Daejeon
    more
Re: Separate severance pay bank account?
« Reply #2 on: May 04, 2015, 02:05:53 pm »
This sounds confusing.  What kind of school? Hagwon, public school, or other.   Maybe they are treating you the same as a Korean and having you do the same kind of red tape procedure.

Now I highly doubt they are confusing the severance with National pension.  Through I do wonder if they set up an individual retirement plan rather than the usual default severance.
Please consider adding some info to your "Personal Text"  Like type of school, visa status, county of origin.  These little bits of info can help people help you.


  • ohitsgary
  • Veteran

    • 239

    • January 06, 2013, 07:28:15 am
    • London
Re: Separate severance pay bank account?
« Reply #3 on: May 04, 2015, 02:37:19 pm »
I'm at a public school.


Re: Separate severance pay bank account?
« Reply #4 on: May 04, 2015, 06:20:22 pm »
 There was a recent change or something to this. Apparently your school had/has the option to sign you up for "bank severance" where your severance will be forwarded by the school to the bank, each year.

The old way is for the school to hold the severance and pay your severance on the final level times the number of years with your school. Example: Final level times X years = total –minus taxes = grand total. This still in practice, in some schools

With this "Bank severance" it will only be based on the amount you contribute each year. Example 1st year = 2.0 million won. 2nd year = 2.2 million won. The total is 4.2 million won + interest – taxes = TOTAL.

I do believe you had to sign a document for this to happen, but who knows if someone just signed for you and/or you were told to sign this document and they just said 'it's for severance' and there was a typical lack of communication.

with the "Bank severance" system, it has to be payed out to that  IRP account.
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  • rowdes
  • Veteran

    • 139

    • June 23, 2010, 02:37:28 pm
    • south korea
Re: Separate severance pay bank account?
« Reply #5 on: May 05, 2015, 09:41:41 am »
I;ve recently had this done and it is a pain. You HAVE to open an IRP account and I believe it can only be opened at a NH.

Make sure you head into a main branch. The smaller branches are unable to process your application for an IRP account.


  • Korea13
  • Super Waygook

    • 494

    • May 29, 2013, 08:36:18 am
    • korea
Re: Separate severance pay bank account?
« Reply #6 on: December 22, 2015, 09:02:37 am »
It's the time of the year where most teacher are leaving.

Is the "severance bank" still a requirement or can employer just pay severance into a teacher account on the last day?

Will be leaving soon and need to work it out.


  • lovebunny
  • Veteran

    • 107

    • August 28, 2013, 08:14:15 am
    • Daejeon
Re: Separate severance pay bank account?
« Reply #7 on: February 25, 2016, 09:53:36 am »
^ Today is my last day in Korea. I'm due to leave in an hour and I was just told I had to set up this IRP account to get my severance pay  :undecided:

Seems like every school does it differently.


  • courtlandmiles
  • Veteran

    • 208

    • April 30, 2012, 10:14:55 am
    • Anyang, Gyeonggi-do, South Korea
Re: Separate severance pay bank account?
« Reply #8 on: February 25, 2016, 11:20:06 am »
I went through this a few weeks ago. My last co teacher and I went to NH to set this thing up, then went to my main bank (KB) to see if I could have the accounts set up to automatically transfer to one another. We contacted my school and found out we didn't need to set up the NH account anyway (I guess someone changed their mind), so we just had my severance pay set to go into my KB account, then set up internet banking for me so I can just wire transfer the money to myself when I get home to the States.

Long story short, we opened an account at NH for nothing. Waste of an afternoon.


  • donuts81
  • Hero of Waygookistan

    • 1364

    • October 20, 2010, 10:23:37 am
    • Korea
Re: Separate severance pay bank account?
« Reply #9 on: February 25, 2016, 02:59:05 pm »
There was a recent change or something to this. Apparently your school had/has the option to sign you up for "bank severance" where your severance will be forwarded by the school to the bank, each year.

The old way is for the school to hold the severance and pay your severance on the final level times the number of years with your school. Example: Final level times X years = total –minus taxes = grand total. This still in practice, in some schools

With this "Bank severance" it will only be based on the amount you contribute each year. Example 1st year = 2.0 million won. 2nd year = 2.2 million won. The total is 4.2 million won + interest – taxes = TOTAL.

I do believe you had to sign a document for this to happen, but who knows if someone just signed for you and/or you were told to sign this document and they just said 'it's for severance' and there was a typical lack of communication.

with the "Bank severance" system, it has to be payed out to that  IRP account.

Interesting. Shame interest rates are in the toilet. Depending on your pay scale it might be good to try and avoid this.
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Re: Separate severance pay bank account?
« Reply #10 on: February 26, 2016, 06:58:23 am »
I asked my school about severance pay, as I will leave this year. They told me that I need to open a new bank account, called IRP (Individual Retirement Pension). If I set this up, then they're able to send the severance to that account. For some reason, they can't send the money to my regular account. Is this a normal procedure and can I just open an IRP account from any bank?

I'm not going to read the other replies so this might be repetitive.

I cashed out last year and then returned after a 3 month hiatus. They asked me where I would like to have my money sent. They don't have a special account that you must set up in order to cash out. I have a remittance account, which sends money directly to my bank in the States. That worked perfectly, but I could have just as easily just sent it to my normal account.


Re: Separate severance pay bank account?
« Reply #11 on: February 26, 2016, 08:55:59 am »
This topic seems to pop up every few months around the exodus of teachers. It seems pretty common. The school is either following some new directive, or an old directive. Since nothing is this country seems to be uniform I'd just do with the flow.