Samsung Elec. to introduce peak wage system

Samsung Elec. to introduce peak wage system

Lee Jin-myung

2014.02.27 17:58:22

Samsung Electronics is set to adopt a peak salary system, which extends retirement age to 60 for senior workers, two years before the relevant law comes into effect. 
South Korea’s electronics behemoth said Thursday that it reached an agreement during an employees’ meeting on the peak salary system, which extends retirement age for aged workers to 60 in return for gradually reducing their salaries from the age of 56.
Under Samsung Electronics’ new retirement formula, employees are entitled to work up to age 60 from the current 55.
Employees aged 56 will receive 90 percent of the amount they are paid at the age of 55. Then, they will get 81 percent at the age of 57, 73 percent at the age of 58, 66 percent at the age of 59 and 60 percent at the age of 60.
Over the course of the peak salary system, workers will enjoy the same employee benefits, such as tuition fee and medical expense support, as they did before. Employees aged 55 may choose between extension of retirement age/peak wage system and voluntary retirement. The new system will become effective starting from March.
On top of Samsung Electronics, other affiliates of Samsung Group including Samsung Electro-mechanics, Samsung Display and Samsung SDI are under discussion among employees to decide whether to embrace the peak wage system and extend retirement age.
The move by Samsung Electronics will help ease concerns over possible consequences of the National Assembly’s mandatory retirement age for the public sector and big businesses.
As LG Electronics and KB Kookmin Bank already introduced the peak wage system, more companies will likely follow suit.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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