Academic journal article Washington International Law Journal

Korean Divorce Law on Claims for Property Division: Dividing Retirement Allowance in Divorce

Academic journal article Washington International Law Journal

Korean Divorce Law on Claims for Property Division: Dividing Retirement Allowance in Divorce

Article excerpt

Faye Y. Park[dagger]

Abstract. As South Koreans divorce closer to the retirement age, the issue of whether retirement allowance should be divided upon divorce has become more prevalent. The applicable law in the division of the retirement allowance in a divorce is Article 8392 of the Civil Code. This article provides that property realized through the cooperation of both spouses shall be divided in divorce by agreement. The Korean courts have historically undervalued the contribution of spouses who provide housework by giving them less property in the division of acquired marital property. Retirement allowances pose problems because a spouse can contribute in acquiring them solely by providing housework, which is difficult to quantify. Furthermore, retirement allowances do not become realized property until the retired spouse receives the retirement allowance; thus the unemployed spouse may not receive a fair amount of property if they divorce before retirement. The Ministry of Justice proposed an amendment to Article 839-2 to include the language that property realized by cooperation shall be divided equally. Once the amendment comes into effect later this year, courts should divide the received retirement allowance equally, regardless of whether one or both parties were economic contributors. Courts, however, should retain the discretion to determine the amount of property each spouse receives to reflect different circumstances, such as the employed spouse's unreceived retirement allowances. Additional amendments to include property that will be realized in the near future are recommended.

I. INTRODUCTION

The divorce rate in South Korea1 for people under forty-five years of age is decreasing,2 but the divorce rate for those over forty-five is increasing.3 Furthermore, the average age of divorce is increasing; men divorce at the age of 45, and women at the age of 39.3.4 Overall, divorce at an older age, which Koreans refer to as hwang-hon5 divorce, is becoming more prevalent.6 With an increasing number of hwang-hon divorces occurring closer to the retirement age, a heated debate is emerging about the divisibility of retirement allowances.7 Disputes over retirement allowances are prevalent. This is because they are lump-sum payments employees receive upon termination of their service with the employer based on the length of their service and rate of pay at the time of termination.8 Unlike retirement pensions that a retiree receives every month, retirement allowances are one-time payments that make up for a large portion of property of the married couple at the time of divorce.

Article 839-2 of the Korean Civil Code governs the division of all property upon divorce by agreement.9 The article provides that each spouse has a claim to property acquired during marriage through cooperation.10 Under this statute, the court has the broad discretion to determine what property is divisible and to determine the method of division, taking into consideration how the property was originally acquired.

Application of Article 839-2 to retirement allowances raises many questions, particularly where only one spouse is employed while the other does mostly housework. The court must identify whether the houseworkproviding spouse "cooperated" in accumulating the property. Once the court determines that the spouse made a valuable contribution in accumulating the retirement allowance, however, the question still remains on whether unreceived retirement allowances should be part of the divisible property. Furthermore, the court must decide the most equitable division method of the retirement allowances by taking into account how much each spouse contributed to the property.

One of the most illustrative case rulings on the issue of whether yetto-be received retirement allowances of employed spouses should be subject to division of property is the Korean Supreme Court11 decision 2002S36.12 In that case the Korean Supreme Court held that a spouse's future retirement allowance is not subject to division upon divorce. …

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