Military personnel with reduced retirement pensions due to cut annual leave compensation during COVID-19... "Illegal calculation method"

A soldier who was disadvantaged in the calculation of his retirement pension due to not receiving annual leave compensation during the COVID-19 pandemic won an administrative lawsuit against the military authorities.

The Seoul Administrative Court, Administrative Division 8 (Presiding Judge Lee Jeong-hee) ruled in favor of Plaintiff A on November 26 last year in the case (2022GuHap63355) filed against the Armed Forces Financial Management Corps to cancel the decision on military pension benefit payment.

The offline job fair for military personnel, which had not been held due to COVID-19, was held for the first time in three years. On the 11th, soldiers were looking for jobs at the "2022 First Half 1st Military Personnel Job Fair" held at Hall 5 of KINTEX in Goyang, Gyeonggi Province. This event featured over 120 company booths for recruitment interviews and consultations, as well as recruitment briefings and special lectures by notable figures. The Ministry of National Defense plans to hold a total of three job fairs this year, including this first fair, with additional events scheduled for June and September. Photo by Moon Honam munonam@

A served as a soldier from 1989 to 2021 before retiring. In 2020, as the government needed to secure a budget for emergency disaster relief payments amid the spread of COVID-19, the budget for soldiers' annual leave compensation was cut. As a result, soldiers including A either used their annual leave or did not, but did not receive annual leave compensation in 2020.

In July 2021, the Armed Forces Financial Management Corps notified A of a retirement lump sum payment of approximately 113 million KRW and a retirement pension for July of about 4 million KRW. A filed a request for pension benefit cancellation review with the Military Injury Compensation Pension Reexamination Committee in September of the same year, but after it was dismissed, he filed a lawsuit.

A’s side argued that "soldiers who retired in 2020 without receiving annual leave compensation were disadvantaged in pension amount calculation compared to those who retired in other periods." First, A’s side claimed that the provisions of the Enforcement Decree of the Military Pension Act, which formed the basis for the pension payment decision, "violate the constitutional principle of equality and infringe on property rights such as the right to receive retirement pension under the Military Pension Act, thus are unconstitutional."

A’s side also pointed out defects in the 'retirement pension calculation method.' According to the Military Pension Act, pension calculation is based on the 'average monthly salary' for service periods before July 1, 2013, and on the 'average standard monthly income' for service periods after that date, with the pension amounts calculated separately and then summed. A’s side argued, "According to the Enforcement Decree of the Military Pension Act, the 'average monthly salary' should be calculated by applying the 'rate of change of the standard monthly income of all soldiers,' but instead, the rate of change of the average standard monthly income of 'all public officials' was applied."

The court accepted A’s claim that there was a defect in the retirement pension calculation method and ruled that the decision was illegal.

The court stated, “Since the Enforcement Decree of the Military Pension Act explicitly stipulates that 'for service periods before the enforcement of this decree, the average standard monthly income of all soldiers' should be applied, it must be applied accordingly. The mere fact that the 'average standard monthly income of all soldiers' was not announced or that there were calculation difficulties does not justify the illegality of not applying it.”

Furthermore, the court noted, "Although the Enforcement Decree of the Military Pension Act was revised again in October 2022, changing the average monthly salary calculation in the supplementary provisions from the 'average standard monthly income of all soldiers' to the 'average standard monthly income of all public officials' uniformly, this change occurred after the decision in this case and therefore does not affect the decision."

However, the court did not accept the claim that the Enforcement Decree of the Military Pension Act is unconstitutional. The court explained, "Regarding annual leave compensation, the amount paid inevitably varies each year depending on the available budget, and there can be various methods to reflect this in the retirement pension calculation. Consequently, the pension amount may differ somewhat depending on the timing of retirement, and making the pension calculation completely equitable is nearly impossible due to technical limitations in calculation methods and legislation," concluding that the decree does not violate the principle of equality.

Additionally, the court stated, "The disputed provision does not reduce the plaintiff’s retirement pension or infringe on the plaintiff’s right to receive the retirement pension; it only concerns the method of calculating the plaintiff’s retirement pension, so it is difficult to consider it unconstitutional for infringing property rights."

Hong Yoon-ji, Reporter for Legal Newspaper

※This article was written based on content provided by the Legal Newspaper.

※This article is based on content supplied by Law Times.

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