Government guidelines neededThe Supreme Court ruled that severance payments, pensions and retirement funds are joint marital assets divisible upon separation and divorce. Since retirement plans are among the biggest assets in many marriages other than homes, the decision will be a windfall for many divorced Korean wives. Pensions and severance payments are often the only nest egg for retiring Koreans. But divorcing wives were left in the cold before the court’s decision. The poverty rate for elderly women is 6 percentage points higher than for men.
Real changes are possible when the government takes administrative actions following the highest court’s decision. The government must revise the law according to the Supreme Court’s ruling to prevent confusion. Otherwise, the highest court’s ruling will lose its meaning. Separating or separated couples would have to go the court to settle disputes over retirement plans and pensions, making divorce settlements uglier.
To prevent such confusion, the government must set the guideline with its public pensions, which are currently available for government employers, soldiers and teachers. It could benchmark the National Pension Fund. The national pension scheme has been divisible since 1999. A spouse is entitled to an equal share of the national pension contribution according to the number of years of marriage. The National Pension Service divides the pension fund upon a request from the contributors. The other public fund operators should do the same.
It doesn’t make sense if the government employees’ pension, which is much larger than the national pension scheme, is not divisible according to the law.
The division of severance pay is trickier. Even with the ruling, the law cannot be enforced in practice since it is up to employers. The Supreme Court decision does not offer any guidelines. The Ministry of Employment and Labor should come up with guidelines for companies to divide severance and retirement funds for their employers and families.
JoongAng Ilbo, July 18, Page 30