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Korean Government Moving to Make Retirement Pension Plans Obligatory
Initially for Companies with 100 or More Employees
Korean Government Moving to Make Retirement Pension Plans Obligatory
  • By Michael Herh
  • November 14, 2019, 13:36
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The Korean government will seek to convert the retirement allowance system into an obligatory retirement pension plan for companies with 100 or more employees by the end of next year.

The Korean government will go ahead with a plan to convert the retirement allowance system into an obligatory retirement pension plan for companies with 100 or more employees by the end of next year. It plans to make retirement pension mandatory for all companies with five or more employees by 2026 to help salaried workers accumulate assets after retirement.

The Pan-Government Population Policy Task Force announced a set of measures on Nov. 13 to cope with population aging, including the promotion of retirement pensions and housing pensions.

The government plans to make retirement pension plans compulsory and increase tax benefits to encourage companies to introduce them. It will work to expedite the National Assembly's passage of an amendment to the Employment Retirement Benefit Guarantee Act, which proposes a phased introduction of mandatory retirement pension plans by 2026.

The subscription rate of retirement and personal pension plans stood at 50.2 percent and 12.6 percent, respectively, in 2017. For SMEs and small businesses, the government introduced the SME Retirement Pension Plan financed by funds paid by them.