Colleges pad salaries by paying for pensions

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Colleges pad salaries by paying for pensions

The Ministry of Education said on Wednesday that 39 colleges across the nation have been caught unlawfully spending 186 billion won ($163.1 million) by covering the pension payments for their school personnel.

The practice is causing an uproar as the schools mostly drew from student tuition fees to pay the teachers’ pensions, which account for 7 percent of their salary.

Traditionally, a company pays a matching 50 percent of the total, but in this case the colleges were paying the entire amount.

“We found 29 private four-year universities, seven vocational colleges and three other higher education institutes paid the school staff’s pension fees, amounting to 186 billion won in total,” stated the Education Ministry.

Out of the 186 billion won, 70 percent came from what schools call “educational expenditures,” which is largely made up of students’ tuition fees.

This is not the first time that the schools have been accused of paying by proxy. In 2011, five universities spent 22 billion won to cover their administrative workers’ pension payments.

Twenty-three institutions stated in a collective agreement with the labor union that they will cover their employees’ pension payments.

Many frown upon the exorbitant treatment as the position has already been touted as a cushy job with significant rewards in return for relatively low-intensity labor.

“A raise in wages could go against the public sentiment, which considers school personnel as being extremely well-treated,” said a professor at one of the accused private schools in Seoul, who wished to remain anonymous due to the sensitivity of the issue.

“It seems that the schools found a way to treat them better by covering the pension fees,” the professor said.

The schools’ illegal treatment further irks the public as many parents and students struggle to afford high college tuition fees.

Tuition in Korea ranks fourth-highest among the member countries of the Organization for Economic Co-operation and Development (OECD), according to the latest data this year.

A parents association called Haksamo issued a statement yesterday, calling on the schools to pay back part of the tuition fees.

“The schools and staff members unfairly took advantage of the college tuition fees that were collected by hard-working parents and students,” said the organization through the statement.

“Most of us struggle to pay the high tuition fees and there have been suffering students and parents who took their lives finding the cost too high to pay while others took on debt they couldn’t pay back. The schools should’ve focused on improving the welfare for the students and offering quality courses but what they did is take care of the school staff,” it said.

Despite the public discontent, the penalty handed down by the education authority did little to ease the anger.

The Education Ministry ordered the schools to stop making the pension payments and issued a warning, but refrained from retrieving the money.

The education regulator also declined to reveal the names of the schools, upsetting school faculty as well as students.

“Their practice obviously violates the law. The staff members should return the money” said Park Geo-yong, president of Korea Higher Education Research Institute.



BY SUNG SI-YOON [ejpark@joongang.co.kr]

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