Samsung Electronics said Friday it plans to adopt a “wage peak” system this year, a move expected to bring significant changes to the local labor market.

The company said its wage peak system will extend the retirement age to 60 from the current 55, while cutting the paycheck by 10 percent in the last five years at work, allowing workers to stay at Samsung for a longer term.

A wage peak system allows employees to accept a reduced salary for an opportunity to work past the retirement age set by the company.

Samsung’s latest move came as South Korea’s National Assembly passed a bill in April last year that would make it mandatory for the public sector and big businesses with 300 or more employees to extend the retirement age to 60 or above from 2016 and others from 2017. (Yonhap)