The labor union of bank employees has demanded that banks extend the retirement age with no strings attached, lashing back at mass restructuring and the incoming wage peak system.

As most banks are pledging to slim down by all means and introducing voluntary retirement schemes, the request is likely to be turned down but it may possibly affect the few banks that have not yet adopted the wage peak system.

Under this system pushed by the government, the retirement age has been extended to 60 from the current range of 53 to 58 and the paycheck for elderly workers slashed by about 10 percent over their last several years at work.

The Korean Financial Industry Union is considering including an unconditional retirement age extension clause in its yearly salary negotiations, according to officials on Sunday.

Late last month, NH Financial Group decided to adopt the compromising wage system starting next year, following suit after KB Kookmin Bank, Woori Bank, Hana Bank, Korea Exchange Bank and Industrial Bank of Korea. KB Kookmin Bank took the most drastic move this year, by letting over 1,122 senior employees take early retirement in June.

Shinhan Bank, the nation’s No. 1 bank in assets and profits, has been discussing the issue with its labor union, but the process is currently suspended due to the KFIU’s move.

“Even the banks that have adopted the wage peak system have not yet figured out how to allocate their senior employees,” said an official of the labor union.

“But if banks extended the retirement age without applying the wage peak system, employees will continue to serve in their conventional fields of work, which will be beneficial both for the bank and the employees.”

Critics have also pointed out that in highly professional operations such as banks, it may be ineffective to send senior employees to soft job positions and to apply a uniform wage cut upon them.

“Instead of cutting the wages en bloc, banks should apply differentiated incentives, considering the work capacity and past performance of individual employees,” said a report by the Hyundai Research Institute.

Despite resistance from bank unionists and concerns from observers, however, it is the general consensus that banks should push ahead with restructuring in order to cut down costs and boost profits.

By Bae Hyun-jung (tellme@heraldcorp.com)