CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to ensuring the stable livelihoods of employees in their old age by stipulating matters necessary to establish and operate a retirement benefit scheme for employees.
The definitions of the terms used in this Act are as follows:
| 5. | The term "benefits" means an annuity or lump sum paid to employees under a retirement benefit scheme or an individual retirement pension scheme prescribed in Article 25; |
| 6. | The term "retirement benefit scheme" means a defined benefit plan, a defined contribution plan, and a retirement allowance system under Article 8; |
| 7. | The term "retirement pension plan" means a defined benefit plan, a defined contribution plan, and an individual retirement pension plan; |
| 8. | The term "defined benefit plan" means a retirement pension plan in which the amount of the benefits an employee will receive is predetermined; |
| 9. | The term "defined contribution plan" means a retirement pension plan in which the amount of an employer's contribution to pay benefits is predetermined; |
| 10. | The term "individual retirement pension plan" means a retirement pension plan established to accumulate and operate the lump sum paid by a participant or the contributions paid by an employer or a participant according to the participant's choice in which the amount of the benefits or contributions is not predetermined; |
| 11. | The term "participant" means an employee who has joined a retirement pension plan; |
| 12. | The term "reserve" means money accumulated with contributions paid by an employer or a participant in order to pay benefits when a ground for the payment occurs, such as retirement of the participant; |
| 13. | The term "retirement pension trustee" means a person registered in accordance with Article 26 in order to operate and manage the retirement pension plan or to manage its assets. |
| Article 3 (Scope of Application) |
This Act shall apply to all businesses or workplaces (hereinafter referred to as "businesses") employing employees: Provided, That this shall not apply to businesses employing only relatives cohabiting with their employer, nor to private households with employed persons.
CHAPTER II ESTABLISHMENT OF RETIREMENT BENEFIT SCHEMES
| Article 4 (Establishment of Retirement Benefit Schemes) |
| (1) | Each employer shall establish at least one retirement benefit scheme in order to pay benefits to retiring employees: Provided, That this shall not apply to employees whose continuous service period is less than one year, nor employees whose average weekly working hours over a four-week period is less than 15 hours. |
| (2) | In establishing a retirement benefit scheme pursuant to paragraph (1), no differentiation shall be made within the same business in respect of the application, etc. of the method for calculating the amount of benefits or contributions. |
| (3) | If any employer intends to establish a type of retirement benefit scheme or change an existing type into a different one, the employer shall, if a trade union participated by a majority of employees exists at the business concerned, obtain the consent of the trade union, and if no such trade union exists, obtain the consent of a majority of employees (hereinafter referred to as "representatives of employees"). |
| (4) | If any employer intends to change the details of a retirement benefit scheme established or changed pursuant to paragraph (3), he or she shall seek opinions from the representatives of employees: Provided, That if the employer intends to change such details in a manner unfavorable to employees, he or she shall obtain the consent of the representatives of employees. |
| Article 5 (Retirement Benefit Schemes of Newly Established Businesses) |
The employer of a business newly established on or after the enforcement date of the Guarantee of Employees' Retirement Benefits Act as wholly amended by Act No. 10967 (excluding where merged or partitioned) shall establish a defined benefit plan or a defined contribution plan within one year of the establishment of the business after seeking the opinions of the representatives of employees.
| Article 6 (Establishment of Two or More Retirement Pension Plans for Participants) |
| (1) | Where an employer simultaneously establishes a defined benefit plan and a defined contribution plan for participants, the amount of benefits under the defined benefit plan or the amount of contributions under the defined contribution plan shall be as follows, notwithstanding Articles 15 and 20 (1): |
| 1. | Benefits under the defined benefit plan: The amount obtained by multiplying the amount of benefits prescribed in Article 15 by the establishment ratio prescribed by rules for defined benefit plan; |
| 2. | Contributions under the defined contribution plan: The amount obtained by multiplying the amount of contributions prescribed in Article 20 (1) by the establishment ratio prescribed by rules for defined contribution plan. |
| (2) | An employer shall formulate rules for retirement pension plan whereby a retirement pension plan is established in such a manner that the total of the respective establishment ratios referred to in paragraph (1) 1 and 2 shall not be less than one. |
| Article 7 (Protection of Entitlement to Receive Benefits) |
| (1) | An entitlement to receive benefits under a retirement pension plan shall neither be transferred to others nor offered as collateral. |
| (2) | Notwithstanding paragraph (1), a participant may provide an entitlement to receive benefits as collateral to the extent prescribed by Presidential Decree where the grounds and conditions prescribed by Presidential Decree, such as housing purchases, are fulfilled. In such cases, a retirement pension trustee registered under Article 26 shall cooperate with the participant so that he or she can secure the loan with the benefits as collateral. |
| Article 8 (Establishment of Retirement Allowance Systems) |
| (1) | Any employer who intends to set up a retirement allowance system shall establish a system that makes it possible to pay a retiring employee a prorated amount equivalent to average wages earned for 30 days for each year of his or her continuous service. |
| (2) | Notwithstanding paragraph (1), any employer may, upon request by an employee due to a ground prescribed by Presidential Decree, such as housing purchases, pay such employee a retirement allowance for his or her continuous service period prior to his or her retirement. In such cases, the continuous service period to be used for the calculation of the amount of a retirement allowance accumulated thereafter shall be reckoned anew from the time when the balance is settled. |
| Article 9 (Payment of Retirement Allowances) |
Where any employee retires from his or her office, the employer shall pay such employee a retirement allowance within 14 days from the date when a ground for the payment occurs: Provided, That the payment date may be delayed under an agreement by the parties concerned in extraordinary circumstances.
| Article 10 (Extinctive Prescription of Retirement Allowances) |
If an entitlement to receive a retirement allowance under this Act has not been exercised within three years, the extinctive prescription of such entitlement shall be complete.
| Article 11 (Treatment of Non-Establishment of Retirement Benefit Scheme) |
Notwithstanding the main sentence of Article 4 (1) and Article 5, if any employer fails to establish a retirement benefit scheme or an individual retirement pension scheme under Article 25 (1), such employer shall be deemed to have established a retirement allowance system under Article 8 (1).
| Article 12 (Preferential Payment of Retirement Benefits) |
| (1) | Retirement allowances that an employer is obligated to pay, benefits under a defined benefit plan as prescribed in Article 15, delinquent contributions and interest for arrears on delinquent contributions of the contributions under a defined contribution plan as prescribed in Article 20 (3), and delinquent contributions and interest for arrears on delinquent contributions of the contributions under an individual retirement pension plan as prescribed in Article 25 (2) 4 (hereinafter referred to as "retirement benefits, etc.") shall be paid in preference to taxes, public charges and other claims, except for claims secured by pledges or mortgages on the whole property of the employer: Provided, That this shall not apply to taxes and public charges taking precedence over pledges or mortgages. |
| (2) | Notwithstanding paragraph (1), retirement benefits, etc. for the final three years of service shall be paid in preference to claims secured by pledges or mortgages, or to taxes, public charges, and other claims on the whole property of an employer. |
| (3) | The amount of retirement allowances of the retirement benefits, etc. and the amount of benefits under a defined benefit plan as prescribed in Article 15 shall be a prorated amount equal to the average wages earned for 30 days for each year of continuous service. |
| (4) | The amount of contributions under a defined contribution plan as prescribed in Article 20 (1) and the amount of contributions under an individual retirement pension plan as prescribed in Article 25 (2) 2, of the retirement benefits, etc., shall be an amount equal to 1/12 of the total annual wages of the participant. |
CHAPTER III DEFINED BENEFIT PLANS
| Article 13 (Establishment of Defined Benefit Plans) |
Any employer who intends to establish a defined benefit plan shall prepare rules for defined benefit plan stipulating the following matters with the consent of, or after seeking opinions from, the representatives of employees under Article 4 (3) or 5 and shall report such rules to the Minister of Employment and Labor: | 1. | Matters relating to the selection of a retirement pension trustee; |
| 2. | Matters relating to participants; |
| 3. | Matters relating to the period of contribution; |
| 4. | Matters relating to the amount of benefits; |
| 5. | Matters relating to the securing of ability to pay benefits; |
| 6. | Matters relating to the types of benefits, eligibility requirements, etc. of recipients; |
| 7. | Matters relating to the conclusion and termination of contracts to provide operational management services under Article 28 and asset management services under Article 29, and transfer of contracts following the termination thereof; |
| 8. | Matters relating to notification of the current state of operation; |
| 9. | Matters relating to the occurrence of a ground for the payment of benefits, such as the retirement of a participant, and procedures for the payment of benefits; |
| 10. | Matters relating to the grounds, procedures, etc. for the abolition and suspension of the retirement pension plan; |
| 11. | Other matters prescribed by Presidential Decree to operate the defined benefit plan. |
| Article 14 (Contribution Period) |
| (1) | The period of contribution prescribed in subparagraph 3 of Article 13 shall be the period of service in the business concerned since the establishment of the retirement pension plan. |
| (2) | The period of service before the establishment of the retirement pension plan concerned may be included in the period of contribution. In such cases, the period for which a retirement allowance is settled in advance under Article 8 (2) shall be excluded therefrom. |
| Article 15 (Amount of Benefits) |
The amount of benefits referred to in subparagraph 4 of Article 13 shall be determined in a way that the amount of lump-sum benefits calculated on the basis of the retirement date of a participant shall not be less than a prorated amount equivalent to the average wages earned for 30 days for each year of his or her continuous service.
| Article 16 (Securing of Ability to Pay Benefits) |
| (1) | In order to secure the ability to pay benefits, an employer who has established a defined benefit plan shall reserve at the end of each business year an amount which is not less than the amount obtained by multiplying the larger of the following amounts (hereinafter referred to as "standard policy reserve") by the rate prescribed by Presidential Decree, which is not less than 60/100 (hereinafter referred to as "minimum reserve"): Provided, That where the period of service before the establishment of the retirement pension plan concerned is included in the period of contribution under Article 14 (2), the rate shall comply with the one prescribed by Presidential Decree: |
| 1. | The amount calculated by the method prescribed by Ordinance of the Ministry of Employment and Labor, which is obtained by deducting the present value of the estimated revenues accruing from contributions for the future period of service from the present value of the estimated expenses incurred in paying benefits for the contribution period until the estimated time of retirement; |
| 2. | The amount calculated by the method prescribed by Ordinance of the Ministry of Employment and Labor, using the estimated expenses incurred in paying benefits for the contribution period until the last day of the business year concerned of a person who is or was a participant. |
| (2) | A retirement pension trustee who operates and manages a defined benefit plan shall ascertain whether the reserve calculated as prescribed by Ordinance of the Ministry of Employment and Labor exceeds the minimum reserve and shall notify the employer of the result thereof as prescribed by Presidential Decree within six months after the end of each business year: Provided, That he or she shall also inform the representatives of employees of the results of ascertainment, if said reserve falls short of the minimum reserve. <Amended on May 26, 2020> |
| (3) | If the reserve is found to fall short of the minimum reserve prescribed by Presidential Decree as a result of ascertainment under paragraph (2), the employer shall make up for a deficiency in the reserve as prescribed by Presidential Decree. |
| (4) | In the event that the reserve at the end of each business year is found to exceed the standard policy reserve as a result of ascertainment prescribed in paragraph (2), the exceeding portion may be offset against the contributions to be paid in the future, and where the reserve at the end of each business year exceeds 50/100 of the standard policy reserve, the exceeding portion may be refunded to the employer, if requested by the employer. |
| Article 17 (Types of Benefits and Eligibility Requirements of Recipients) |
| (1) | The types of benefits under a defined benefit plan shall be either an annuity or a lump-sum benefit, and the eligibility requirements of recipients shall be as follows: |
| 1. | Annuities shall be paid to persons aged 55 or over, whose contribution period exceeds 10 years. In such cases, the payment period thereof shall exceed five years; |
| 2. | Lump-sum benefits shall be paid to participants who fail to meet the eligibility requirements to receive annuities or wish to receive lump-sum benefits. |
| (2) | An employer shall ensure that a retirement pension trustee pays all the benefits that it is obligated to pay within the limit of the reserve (in cases of bankruptcy of a business or other cases prescribed by Presidential Decree, the amount corresponding to the rate of the reserve to the amount prescribed in Article 16 (1) 2) within 14 days after a ground for the payment occurs as prescribed in paragraph (1), such as retirement of the participant: Provided, That in extraordinary circumstances, such as where the sale of the employed assets that have been invested with the reserve under a retirement pension plan is not made within a short period of time, the payment date may be extended by agreement among the employer, participants, and the retirement pension trustee. |
| (3) | When the amount of benefits paid by a retirement pension trustee under paragraph (2) falls short of the amount of benefits prescribed in Article 15, the employer shall pay the deficiency to the relevant employee within 14 days after a ground for the payment of benefits occurs. In such cases, the payment date may be extended by agreement between the parties. |
| (4) | The benefits prescribed in paragraph (2) or (3) shall be paid in the way of transfer to the account of an individual retirement pension plan designated by each participant; Provided, That this shall not apply where any ground prescribed by Presidential Decree exists, such as where a participant receives such benefits after retiring at the age of 55 or over. |
| (5) | Where a participant fails to designate an account of an individual retirement pension plan under paragraph (4), the benefits shall be transferred to an account operated by the retirement pension trustee concerned. In such cases, the participant shall be deemed to have established an individual retirement pension plan at the retirement pension trustee concerned. |
| Article 18 (Notification of Current Status of Operation) |
Each retirement pension trustee shall notify participants of the amount of reserve, rate of returns, etc. at least once every year, as prescribed by Ordinance of the Ministry of Employment and Labor.
CHAPTER IV DEFINED CONTRIBUTION PLANS
| Article 19 (Establishment of Defined Contribution Plans) |
| (1) | Any employer who intends to establish a defined contribution plan shall prepare rules for defined contribution plan containing the following matters with the consent of, or after seeking opinions from, the representatives of employees pursuant to Article 4 (3) or 5 and shall report such rules to the Minister of Employment and Labor: |
| 1. | Matters relating to the allocation of contributions; |
| 2. | Matters relating to the payment of contributions; |
| 3. | Matters relating to the operation of reserves; |
| 4. | Matters relating to the methods of operating reserves, supply of information, etc.; |
| 5. | Matters relating to early withdrawal; |
| 6. | Matters relating to subparagraphs 1 through 3 and 6 through 10 of Article 13; |
| 7. | Other matters prescribed by Presidential Decree as necessary to operate the defined contribution plan. |
| (2) | Where a defined contribution plan is established under paragraph (1), Article 14 shall apply mutatis mutandis to the period of contribution, Article 17 (1), (4) and (5) to the types of benefits, eligibility requirements for recipients and the procedures for and methods of paying benefits, and Article 18 to the notification of current status of operation. In such cases, "subparagraph 3 of Article 13" in Article 14 (1) shall be construed as "subparagraph 6 of Article 19, and "defined benefit plan" in Article 17 (1) as "defined contribution plan". |
| Article 20 (Allocation and Payment of Contributions) |
| (1) | An employer who has established a defined contribution plan shall contribute no less than an amount equivalent to 1/12 of the total annual wages of a participant in cash to the participant's account of the defined contribution plan. |
| (2) | Apart from the amount contributed by the employer under paragraph (1), a participant may contribute an additional amount at his or her own expense to his or her account of the defined contribution plan. |
| (3) | An employer shall regularly pay contributions as prescribed in paragraph (1) at least once every year to the accounts of participants of the defined contribution plan. In such cases, if the employer fails to pay contributions by the fixed date (where the extension of the due date is allowed by the rules for defined contribution plan, by the due date so extended), he or she shall be liable to pay interest for arrears at an interest rate prescribed by Presidential Decree within the limit of 40/100 per annum, taking into consideration the overdue interest rates applied by banks as defined in the Banking Act, economic environment, etc. for the number of days of delay from the following day to the date when the contribution is paid. |
| (4) | If the payment of contributions is delayed by an employer due to a natural disaster or any other cause prescribed by Presidential Decree, paragraph (3) shall not apply to the period during which such cause exists. |
| (5) | If an employer fails to pay a contribution for a participant of a defined contribution plan when any cause prescribed by Presidential Decree, such as retirement of the participant, occurs, he or she shall pay the contribution prescribed in paragraph (1) and the interest for arrears prescribed in the latter part of paragraph (3) to the relevant participant's account of the defined contribution plan within 14 days from the date such cause occurs: Provided, That the due date may be extended by agreement between the parties concerned, in extraordinary circumstances. |
| (6) | In lieu of the benefits to be received at the time of retirement, a participant may request the retirement pension trustee concerned to transfer his or her invested assets to his or her account of the individual retirement pension plan that he or she has established. |
| (7) | Upon request by a participant under paragraph (6), the retirement pension trustee concerned shall transfer the invested assets to the participant's account of the individual retirement pension plan. In such cases, the participant's benefits accrued from the operation of the defined contribution plan shall be deemed paid. |
| Article 21 (Methods of Operating Reserves and Supply of Information) |
| (1) | A participant of a defined contribution plan shall be allowed to choose an operating method for himself or herself and change the method of operating reserves at least once every half-year. |
| (2) | A retirement pension trustee shall suggest at least three operating methods with different risk and return structures at least once every half year. |
| (3) | A retirement pension trustee shall supply information required by a participant to choose a method of operating reserves, such as information on the probability of making profits and losses for each operating method. |
| Article 22 (Early Withdrawal of Reserves) |
A participant of a defined contribution plan may withdraw his or her reserves early when a ground prescribed by Presidential Decree, such as housing purchases, occurs.
| Article 23 (Establishment of Defined Contribution Plan where Two or More Employers Participate) |
Where a retirement pension trustee intends to suggest to establish the same defined contribution plan for two or more employers, he or she shall obtain approval from the Minister of Employment and Labor for each of the following matters:
| 1. | Standard rules for the defined contribution plan including the following matters: |
| (a) | Matters set forth in the subparagraphs of Article 19 (1); |
| (b) | Any other matters prescribed by Presidential Decree; |
| 2. | Standard contract for operational management services and asset management services, which contains the matters prescribed by Presidential Decree. |
CHAPTER V INDIVIDUAL RETIREMENT PENSION PLANS
| Article 24 (Establishment and Operation of Individual Retirement Pension Plans) |
| (1) | Any retirement pension trustee may operate an individual retirement pension plan. |
| (2) | Any person falling under any of the following subparagraphs may establish an individual retirement pension plan: |
| 1. | A person who has received lump-sum benefits under a retirement benefit scheme; |
| 2. | A participant of a defined benefit plan or a defined contribution plan who intends to additionally establish an individual retirement pension plan at his or her own expense; |
| 3. | A person prescribed by Presidential Decree as requiring a stable source of old-age income, such as a sole proprietor. |
| (3) | A person who has established an individual retirement pension plan under paragraph (2) shall pay the contributions under the individual retirement plan at his or her own expense: Provided, That the amount to be contributed shall not exceed the limit prescribed by Presidential Decree. |
| (4) | Article 21 shall apply mutatis mutandis to the method of, and supply of information on, the operation of reserves under an individual retirement pension plan. In such cases, "defined contribution plan" shall be construed as "individual retirement pension plan". |
| (5) | Matters relating to eligibility requirements of recipients for each type of benefit of an individual retirement pension plan as well as early withdrawal shall be prescribed by Presidential Decree. |
| Article 25 (Special Cases for Businesses Employing Less Than 10 Employees) |
| (1) | In cases of a business employing less than 10 ordinary employees, if the employer establishes an individual retirement pension plan with the consent, or at the request, of individual employees, it shall be deemed to have established a retirement benefit scheme for the relevant employees, notwithstanding Articles 4 (1) and 5. |
| (2) | In establishing an individual retirement pension plan under paragraph (1), the following shall be complied with: |
| 1. | Where the employer selects a retirement pension trustee, he or she shall obtain the consent of individual employees: Provided, That he or she may select the retirement pension trustee for himself/herself, if requested by the employees; |
| 2. | The employer shall contribute, in cash, at least 1/12 of the total annual wages of each participant to the participant's account of individual retirement pension plan; |
| 3. | A participant shall be allowed to contribute additional amounts at his or her own expense, apart from those contributed by the employer; |
| 4. | The employer shall regularly pay contributions as prescribed in subparagraph 2 to the participant's account of an individual retirement pension plan at least once every year. In such cases, the latter part of Article 20 (3) and Article 20 (4) shall apply mutatis mutandis to the payment of interest on arrears of contributions, the payment of which is delayed; |
| 5. | Any other matter prescribed by Presidential Decree in order to protect employees' entitlement to receive benefits. |
| (3) | Where an employer fails to pay a contribution as prescribed in paragraph (2) 2 for a participant of an individual retirement pension plan when any cause prescribed by Presidential Decree, such as retirement of the participant, occurs, he or she shall pay the contribution and the interest for arrears prescribed in the latter part of paragraph (2) 4 to the relevant participant's account of the individual retirement pension plan within 14 days from the date such cause occurs: Provided, That the due date may be extended by agreement between the parties concerned, in extraordinary circumstances. |
CHAPTER VI RETIREMENT PENSION TRUSTEES AND THEIR PERFORMANCE OF DUTIES
| Article 26 (Registration of Retirement Pension Trustees) |
Any of the following persons who wishes to be a retirement pension trustee shall register himself or herself with the Minister of Employment and Labor after meeting requirements prescribed by Presidential Decree, such as financial soundness, personnel and physical resource requirements: <Amended on May 26, 2020>
| 7. | Any other person corresponding to those under subparagraphs 1 through 6 and prescribed by Presidential Decree. |
| Article 27 (Revocation of Registration of Retirement Pension Trustees and Transfer Orders) |
| (1) | If a retirement pension trustee falls under any of the following subparagraphs, the Minister of Employment and Labor may issue a corrective order or revoke his or her registration as prescribed by Ordinance of the Ministry of Employment and Labor: Provided, That where it falls under subparagraph 1 or 2, he or she shall revoke its registration: |
| 1. | Where the retirement pension trustee is dissolved; |
| 2. | Where the retirement pension trustee obtains registration under Article 26 by fraudulent or other illegal means; |
| 3. | Where the retirement pension trustee fails to meet the requirements for registration under Article 26; |
| 4. | Where the retirement pension trustee fails to comply with an order issued by the Minister of Employment and Labor or the Financial Services Commission pursuant to Article 36. |
| (2) | No retirement pension trustee whose registration is revoked pursuant to paragraph (1) shall be eligible to register as a retirement pension trustee for three years from the date the registration is revoked. |
| (3) | A retirement pension trustee who intends to discontinue the business related to a retirement pension plan shall apply for the cancellation of registration to the Minister of Employment and Labor. In such cases, a retirement pension trustee whose registration is canceled shall not be eligible to register as a retirement pension trustee for two years from the date the registration is canceled. |
| (4) | A retirement pension trustee who has been subject to a disposition of revocation of registration or applied for cancellation of registration under paragraph (1) or (3) shall take measures prescribed by Presidential Decree to protect the participants, including measures necessary to transfer the established retirement pension plans. |
| (5) | If the Minister of Employment and Labor deems it necessary to protect employees' entitlement to receive benefits when registration is revoked or canceled pursuant to paragraph (1) or (3), he or she may order the retirement pension trustee whose registration is revoked or canceled to transfer all or part of his or her services to another retirement pension trustee. In such cases, the Minister of Employment and Labor shall obtain the consent of the retirement pension trustee to whom all or part of such services is transferred. |
| Article 28 (Awarding of Contract on Operational Management Services) |
| (1) | Each employer or participant who intends to establish a retirement pension plan shall award a contract with a retirement pension trustee on the provision of the following services (hereinafter referred to as "operational management services"): Provided, That services mentioned in subparagraph 2 shall only apply when establishing defined benefit plans: |
| 1. | Providing the employer or participants with the methods of operating reserves and information on each operating method; |
| 2. | Designing a pension plan and conducting pension accounting; |
| 3. | Recording, keeping, and informing the current operational state of reserves; |
| 4. | Informing a retirement pension trustee providing asset management services pursuant to Article 29 (1), of the operating method chosen by the employer or participants; |
| 5. | Any other service prescribed by Presidential Decree to ensure the adequate provision of operational management services. |
| (2) | A retirement pension trustee providing operational management services pursuant to paragraph (1) may have a person who meets the requirements prescribed by Presidential Decree, such as personnel and physical resource requirements, provide some of the services prescribed by Presidential Decree. |
| Article 29 (Awarding of Contract on Asset Management Services) |
| (1) | Each employer or participant who has established a retirement pension plan shall award a contract with a retirement pension trustee on the provision of the following services (hereinafter referred to as "asset management services"): |
| 1. | Setting up and managing an account; |
| 2. | Receiving contributions; |
| 3. | Keeping and managing reserves; |
| 4. | Following instructions related to the operation of the reserves which are delivered by a retirement pension trustee providing operational management services; |
| 6. | Any other service prescribed by Presidential Decree to ensure the adequate provision of asset management services. |
| (2) | If an employer or a participant intends to award a contract as prescribed in paragraph (1), it shall be made in terms of an insurance contract or trust contract prescribed by Presidential Decree with his or her employees or the participant as the insured or beneficiaries. |
| Article 30 (Provision of Operational Management Services) |
| (1) | Each retirement pension trustee shall fulfill his or her duty of due care as a good manager. |
| (2) | Each retirement pension trustee shall suggest methods of operating reserves meeting the following requirements: |
| 1. | Information on the operating methods shall be readily obtainable and understandable; |
| 2. | It shall be easy to switch among the operating methods; |
| 3. | The methods of and procedures for evaluating the performance of operation of reserve shall be transparent; |
| 4. | In cases of defined contribution plans and individual retirement pension plans, at least one operating method guaranteeing the payment of principal and interest as prescribed by Presidential Decree shall be included; |
| 5. | They shall be in line with the operating methods and standards prescribed by Presidential Decree, such as diversified investment, to ensure the mid- and long-term stable operation of the reserves. |
| Article 31 (Entrustment of Solicitation Services) |
| (1) | A retirement pension trustee may entrust any person who satisfies all the following requirements (hereinafter referred to as "solicitor for retirement pension plans") with the services prescribed by Presidential Decree to establish retirement pension plans or solicit participants thereof (hereinafter referred to as "solicitation services"): <Amended on May 26, 2020> |
| 1. | He or she shall not be a person registered with the Minister of Employment and Labor pursuant to paragraph (2); |
| 2. | He or she shall have professional knowledge and satisfy the requirements prescribed by Presidential Decree; |
| 3. | Where the registration was revoked under paragraph (6), at least three years shall have passed since the date the registration was revoked. |
| (2) | Where a retirement pension trustee entrusts the solicitation services for retirement pension plans under paragraph (1), he or she shall register the entrusted person with the Minister of Employment and Labor. In such cases, the Minister of Employment and Labor may entrust such registration affairs to an agency prescribed by the Ministry of Employment and Labor, as prescribed by Presidential Decree. |
| (3) | A person entrusted with solicitation services under paragraph (1) shall be prohibited from engaging in the solicitation services of retirement pension plans unless he or she is registered under paragraph (2). |
| (4) | No retirement pension trustee shall entrust any person with solicitation services other than those registered under paragraph (2) as solicitors for retirement pension plans. |
| (5) | Matters necessary for the application, methods and procedures for registration, and any other matters for registration under paragraph (2) shall be prescribed by the Minister of Employment and Labor. |
| (6) | In any of the following cases, the Minister of Employment and Labor may revoke the registration of a solicitor of retirement pension plans registered under paragraph (2) or suspend his or her solicitation services within the limit of six months: |
| 1. | Where he or she fails to satisfy each of the requirements prescribed in paragraph (1); |
| 2. | Where he or she violates any of the matters to be observed by the entrusted person under each subparagraph of paragraph (7). |
| (7) | Where services are entrusted under paragraph (1), the entrusted person shall comply with the following: |
| 1. | He or she shall not re-entrust another person with the entrusted services; |
| 2. | Matters prescribed by Presidential Decree as necessary for the reasonable operation of retirement pension plans, such as prohibition of solicitation activities based on false information. |
| (8) | If a person entrusted with the solicitation services under paragraph (1) fails to comply with the matters to be observed under paragraph (7), the retirement pension trustee shall revoke the entrustment of solicitation services. |
| (9) | A retirement pension trustee shall manage solicitors for retirement pension plans in good faith so that they observe statutes or regulations; cause no harm to the sound trade order when providing the solicitation services; and establish standards for providing solicitation services for such purpose. <Amended on May 26, 2020> |
| (10) | Article 756 of the Civil Act shall apply mutatis mutandis where any solicitor for retirement pension plans causes any damage to an employer or a participant while providing solicitation services. <Amended on May 26, 2020> |
CHAPTER VII RESPONSIBILITIES AND SUPERVISION
| Article 32 (Responsibilities of Employers) |
| (1) | Each employer shall observe statutes or regulations and rules for retirement pension plans and shall faithfully carry out the duties under this Act relating to the matters prescribed by Presidential Decree for participants, etc. |
| (2) | Each employer who has established a retirement pension plan (excluding individual retirement pension plans) shall provide education about the matters provided by Presidential Decree, such as the operating status of the retirement pension plan of the business concerned to the participants in such pension plan at least once every year. In such cases, the employer may entrust such education with the retirement pension trustee. |
| (3) | No employer who has established a retirement pension plan shall commit any of the following: |
| 1. | Awarding a contract to provide operational management services and asset management services for the purpose of benefiting the employer itself or a third person; |
| 2. | Any other act prescribed by Presidential Decree which undermines the proper operation of the retirement pension. |
| (4) | Where any of the following causes exists, each employer who has established a defined benefit plan or a retirement allowance system shall in advance inform his or her employees that retirement benefits may be reduced and, through consultation with the representatives of employees, take necessary measures to prevent the reduction of their retirement benefits such as conversion to a defined contribution plan and improved standards to calculate retirement benefits: <Newly Inserted on Jun. 12, 2018> |
| 1. | Where an employer intends to implement a system to extend or guarantee the retirement age by adjusting the wages of employees based on a certain age, point of continuous service or amount of wage through collective agreements, employment rules, etc.; |
| 2. | Where employees continue to work shorter contractual work hours for at least three months as their employer shortens the contractual work hours by at least one hour a day or five hours a week under agreement with its employees; |
| 3. | Where an employee receives reduced wages due to shortened work hours as the Labor Standards Act (Act No. 15513) enters into force; |
| 4. | Other cases where wages are reduced as prescribed by Ordinance of the Ministry of Employment and Labor. |
| Article 33 (Responsibilities of Retirement Pension Trustees) |
| (1) | Each retirement pension trustee shall observe this Act and shall provide his or her services in good faith for the sake of participants. |
| (2) | Each retirement pension trustee shall observe the terms and conditions of the contracts prescribed in Articles 28 (1) and 29 (1). |
| (3) | No retirement pension trustee shall engage in any of the following acts without justifiable grounds: |
| 1. | Refusing to sign a contract to provide operational management services under Article 28 (1); |
| 2. | Refusing to sign a contract to provide asset management services under Article 29 (1); |
| 3. | Compelling a contract to be signed with a particular retirement pension trustee; |
| 4. | Any other act prescribed by Presidential Decree as likely to undermine the interests of an employer or participant. |
| (4) | No retirement pension trustee providing operational management services shall engage in any of the following acts: |
| 1. | Bearing or promising to bear all or some of the losses suffered by a participant or an employer at the time of signing a contract; |
| 2. | Providing or promising to provide a participant or an employer with any extraordinary benefit prescribed by Presidential Decree, such as providing excessive supplementary services having economic value or bearing the expenses to be borne by a participant or an employer; |
| 3. | Using personal data such as the name and address of a participant beyond the extent necessary to perform duties related to the operation of the retirement pension plan; |
| 4. | Suggesting a particular operating method to a participant or an employer for the purpose of benefiting the retirement pension trustee himself/herself or a third person. |
| (5) | Each retirement pension trustee operating individual retirement pension plans pursuant to Article 24 (1) shall provide the participants with training at least once every year on matters prescribed by Presidential Decree, such as the operating status of the retirement pension plan of the business concerned. |
| (6) | Each retirement pension trustee shall submit details on the performance of retirement pension plans to the employers (excluding the performance of individual retirement pension plans), the Minister of Employment and Labor, and the Governor of the Financial Services Commission, as prescribed by Ordinance of the Ministry of Employment and Labor. |
| (7) | Where any retirement pension trustee intends to establish or amend the terms and conditions or the standard contract relating to the signing of a contract pursuant to Article 28 (1) or 29 (1) (hereinafter referred to as "terms and conditions, etc."), he or she shall, in advance, report such establishment or amendment to the Governor of the Financial Services Commission: Provided, That where it is determined by the Financial Services Commission as having no adverse effect on the rights, interests and duties of employees or employers, he or she may report thereon to the Financial Services Commission within 10 days from such establishment or amendment of terms and conditions, etc. |
| (8) | Each retirement pension trustee shall make public the rate of returns on reserves, commissions, etc. at the end of each year, as prescribed by the Financial Services Commission. |
| Article 34 (Responsibilities of the Government) |
| (1) | The Government shall provide a support system to promote retirement pension plans. |
| (2) | The Government may take necessary measures to ensure the sound establishment and development of retirement pension plans, such as supporting research projects in collaboration with employees' or employers' groups, or agencies or organizations involved in retirement pension business. |
| (3) | The Government shall endeavor to take necessary measures to protect employees' entitlement to receive benefits of retirement pension plans, such as measures for guaranteeing payment of retirement pensions. |
| Article 35 (Supervision over Employers) |
| (1) | If any employer violates this Act or rules for retirement pension in relation to the establishment, operation, etc. of a retirement pension plan, the Minister of Employment and Labor may order such employer to rectify the violation within the prescribed deadline. |
| (2) | If any employer fails to comply with a corrective order within the deadline under paragraph (1), the Minister of Employment and Labor may order suspension of the operation of the retirement pension plan. |
| Article 36 (Supervision over Retirement Pension Trustees) |
| (1) | If any retirement pension trustee commits a violation of this Act, the Minister of Employment and Labor may order such retirement pension trustee to rectify the violation within the prescribed deadline. |
| (2) | If any retirement pension trustee fails to comply with an order for rectification under paragraph (1), the Minister of Employment and Labor may order services provided under this Act to be transferred to another retirement pension trustee. |
| (3) | In order to ensure the stable operation of retirement pension plans and protect employees' entitlement to receive benefits, the Financial Services Commission may supervise the services of retirement pension trustees prescribed by Presidential Decree and take any of the following measures if any retirement pension trustee violates Article 33: |
| 1. | Request for warning against the retirement pension trustee or the executive concerned, or warning or reprimanding the employee concerned, reduction of his or her wage, or suspension or removal from office; |
| 2. | Issuance of a corrective order regarding the violation concerned; |
| 3. | Recommendation of dismissal from office of the executive or suspension of performance of his or her duties; |
| 4. | Partial suspension of the business for a period of six months. |
| (4) | The Governor of the Financial Supervisory Service may investigate the status of the services, property, etc. of a retirement pension trustee, and issue an order to change or supplement the terms and conditions, etc. reported by a retirement pension trustee under Article 33 (7), if they are in contravention of this Act. |
| Article 37 (Request for Financial Transaction Information) |
| (1) | Notwithstanding Article 4 of the Act on Real Name Financial Transactions and Confidentiality and Article 33 of the Use and Protection of Credit Information Act, the Minister of Employment and Labor may, if necessary to supervise the operation of a retirement pension plan, including to ascertain whether an employer has the ability to pay benefits under Article 16, request a retirement pension trustee to provide each of the following information or data relating to the business for which a contract for asset management services and operational management services is concluded (hereinafter referred to as "financial transaction information"): |
| 1. | Current status of participants; |
| 2. | Current status of payment of benefits; |
| 3. | Current status of payment of contributions; |
| 4. | Information on the current status of the operation of reserves. |
| (2) | The requests for the financial transaction information to be made by the Minister of Employment under paragraph (1) shall be in the form of a document stating each of the following matters: |
| 1. | Transaction period requested; |
| 2. | Legal basis of the request; |
| 4. | Details of the financial transaction information requested. |
| (3) | The scope of the financial transaction information to be requested under paragraph (1) shall be reduced to the minimum necessary to supervise the soundness of the operation of a retirement pension plan. |
| (4) | Where a retirement pension trustee provides the Minister of Employment and Labor with financial transaction information under paragraph (2), such retirement pension trustee shall notify the employer or participants concerned of the major details of the financial transaction information provided, purpose of the use thereof, name of the persons who have received the information, and date when the information has been provided, etc. in writing within 10 days from the date when such financial transaction information has been provided. In such cases, Article 4-2 (4) of the Act on Real Name Financial Transactions and Confidentiality shall apply mutatis mutandis to the expenses incurred for such notification. |
| (5) | In requesting a retirement pension trustee to provide financial transaction information under paragraph (1), the Minister of Employment and Labor shall record such fact and keep such record for five years from the date the financial transaction information is requested. |
| (6) | No person who has received and learned financial transaction information under paragraph (1) shall furnish or disclose it to another person, or use it for any other purpose. |
CHAPTER VIII SUPPLEMENTARY PROVISIONS
| Article 38 (Measures to be Taken when Retirement Pension Plan is Abolished or Suspended) |
| (1) | In cases of abolition of a retirement pension plan or suspension of its operation, the retirement allowance system under Article 8 (1) shall be applied to the period after the abolition or during the period of the suspension. |
| (2) | If a retirement pension plan is abolished, the employer shall take measures prescribed by Presidential Decree as necessary to pay benefits from reserves, including payment of the contributions in arrears without delay. |
| (3) | If a retirement pension plan is suspended due to the grounds prescribed in Article 35 (2), etc., the employer and the retirement pension trustee shall continue to perform the basic duties prescribed by Presidential Decree, such as duties necessary for the operation of reserves. |
| (4) | Where the benefits are to be paid to each participant due to the abolition of a retirement pension plan, they shall be paid by the employer and the retirement pension trustee in the way of transfer to the account of the individual retirement pension plan designated by each participant: Provided, That Article 17 (5) shall apply mutatis mutandis where any participant fails to designate an account of an individual retirement pension plan. |
| (5) | If a participant is paid benefits under paragraph (4), he or she shall be deemed paid benefits by the interim settlement as prescribed in Article 8 (2). In such cases, calculation of the period subject to the interim settlement and other necessary matters shall be prescribed by Presidential Decree. |
| Article 39 (Business Cooperation) |
If the Minister of Employment and Labor deems it necessary to implement this Act, he or she may request related agencies, including the Financial Services Commission, to submit materials. In such cases, the agencies requested to submit materials shall not refuse this request unless they have any justifiable ground.
| Article 40 (Reporting and Investigation) |
| (1) | The Minister of Employment and Labor may ask employers and retirement pension trustees to report the implementation status, etc. of their retirement pension plans or to submit related documents or to require relevant persons to appear in person within the extent necessary to implement this Act. |
| (2) | If the Minister of Employment and Labor deems it necessary to implement this Act, he or she may authorize his or her officials to access a workplace implementing a retirement pension plan or a workplace of the relevant retirement pension trustee and ask questions to persons concerned, including the employer and the retirement pension trustee, or investigate documents, such as accounting books. |
| (3) | A public official who intends to have access to a workplace or a workplace of the relevant retirement pension trustee and ask a question of the person concerned or inspect books and other documents shall carry a certificate indicating his or her authority and produce it to the related persons. |
The Minister of Employment and Labor shall hold a hearing if he or she intends to revoke a registration under Article 27 (1) or issue an order for transfer under Article 36 (2).
| Article 42 (Entrustment and Delegation of Authority) |
| (1) | The authority of the Minister of Employment and Labor under this Act may partially be entrusted to the Financial Services Commission or delegated to the head of a regional employment and labor office, as prescribed by Presidential Decree. |
| (2) | The authority of the Financial Services Commission under this Act may partially be entrusted to the Governor of the Financial Supervisory Service, as prescribed by Presidential Decree. |
CHAPTER IX PENALTY PROVISIONS
| Article 43 (Penalty Provisions) |
Any person who violates Article 37 (6) shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 30 million won.
| Article 44 (Penalty Provisions) |
Any person falling under any of the following subparagraphs shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 20 million won: Provided, That in cases falling under subparagraph 1 or 2, the person concerned cannot be prosecuted against the expressed wish of the victim:
| 1. | A person who fails to pay retirement allowance, in violation of Article 9; |
| 2. | A person who fails to pay benefits, contributions or interest for arrears at the time of the retirement of an employee, in violation of Article 17 (2) or (3), 20 (5) or 25 (3); |
| 3. | A retirement pension trustee who fails to take measures to protect participants, in violation of Article 27 (4); |
| 4. | A retirement pension trustee who violates Article 33 (3) or (4). |
| Article 45(Penalty Provisions) |
Any person falling under any of the following subparagraphs shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 10 million won:
| 1. | A person who makes a differentiation within the same business in establishing a retirement benefit scheme, in violation of Article 4 (2); |
| 2. | A person who provides solicitation services of retirement pension plans without filing a registration with the Minister of Employment and Labor, in violation of Article 31 (3); |
| 3. | A retirement pension trustee who entrusts solicitation services to a person who is not a solicitor for retirement pension plans, in violation of Article 31 (4); |
| 4. | An employer who violates the responsibility prescribed in Article 32 (3) 1. |
| Article 46 (Penalty Provisions) |
Any person falling under any of the following subparagraphs shall be punished by a fine not exceeding five million won: <Amended on Jun. 12, 2018>
| 1. | A person who fails to obtain consent from the representatives of employees or each individual employee in violation of Article 4 (3) or (4) or 25 (1) or (2) 1; |
| 3. | An employer who fails to inform an employee that retirement benefits may be reduced or to take necessary measures to prevent the reduction of retirement benefits in violation of Article 32 (4). |
| Article 47 (Joint Penalty Provisions) |
If a representative of a corporation, or an agent, employee or other servant of a corporation or individual commits an offense prescribed in Articles 44 through 46 with regard to the affairs of such corporation or individual, not only shall such offender be punished, but the corporation or individual shall also be punished by a fine prescribed in the relevant Article: Provided, That the same shall not apply where the corporation or individual has not been negligent in giving due attention and supervision relating to the relevant affairs to prevent such violation.
| Article 48 (Administrative Fines) |
| (1) | Any person falling under any of the following subparagraphs shall be subject to an administrative fine not exceeding 10 million won: |
| 1. | An employer who fails to provide training at least once every year pursuant to Article 32 (2); |
| 2. | A retirement pension trustee who fails to provide training at least once every year pursuant to Article 33 (5). |
| (2) | Any person falling under any of the following subparagraphs shall be punished by an administrative fine not exceeding five million won: |
| 1. | An employer who fails to report the rules for defined benefit plan prescribed in Article 13 or the rules for defined contribution plan prescribed in Article 19; |
| 2. | An employer who violates the responsibility prescribed in Article 32 (3) 2; |
| 3. | A retirement pension trustee who violates the responsibility prescribed in Article 33 (2) or (6). |
| (3) | Administrative fines under paragraphs (1) and (2) shall be imposed and collected by the Minister of Employment and Labor, as prescribed by Presidential Decree. |
ADDENDA <Act No. 10967, Jul. 25, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 (Period of Validity of Retirement Insurance, etc.)
| (1) | Where an employer purchases a retirement insurance policy or subscribes to a lump-sum retirement trust (hereinafter referred to as "retirement insurance policy, etc.") prescribed by Presidential Decree on or before December 1, 2005, on which date the Guarantee of Employees' Retirement Benefits Act (Act No. 7379) entered into force with its employees as the insured or beneficiaries, which ensures his/her employees receive lump-sum benefits or annuities, such employer shall be deemed to have established a retirement allowance system under Article 8 (1) of the Guarantee of Employees' Retirement Benefits Act (Act No. 7379): Provided, That the amount of lump-sum benefits paid under the retirement insurance policy, etc. shall not be less than the amount of retirement allowances prescribed in the same Article. |
| (2) | The retirement allowance system referred to in paragraph (1) shall be valid until December 31, 2010. |
Article 3 (Applicability concerning Requirements for Settling Retirement Allowance in Advance before Retirement)
The amended provisions of article 8 (2) shall apply where an employee requests his/her employer to settle his/her retirement allowance in advance before retirement on or after the date this Act enters into force.
Article 4 (Applicability concerning Methods of Paying Benefits)
The amended provisions of Articles 17 (4) and (5), 19 (2) (limited to the part where Article 17 (4) or (5) applies mutatis mutandis), and 38 (4) shall apply where a ground for paying benefits occurs on or after the date this Act enters into force. Article 5 (Applicability concerning Payment of Contributions under Defined Contribution Plans or Individual Retirement Pension Plans)
The part concerning interest for arrears in the amended provisions of Articles 20 (3) and (4), 25 (2) 4, and 25 (3) shall apply where interest for arrears is paid on or after the date this Act enters into force. Article 6 (Applicability concerning Establishment of Individual Retirement Pension Plans by Sole Proprietors, etc.)
Article 24 (2) 3 shall apply from the date on which five years lapse after the promulgation of this Act. Article 7 (Applicability concerning Revocation and Cancellation of Retirement Pension Trustees)
The amended provisions of Article 27 (2) and (3) shall apply where the registration of a retirement pension trustee is revoked or application for the cancellation of registration is filed on or after the date this Act enters into force. Article 8 (Special Cases concerning Time of Enforcement, Benefits, Contributions, etc. of Businesses Employing No More than Four Ordinary Employees)
| (1) | In cases of businesses employing no more than four ordinary employees, a retirement benefit scheme shall be deemed established on or after December 1, 2010, under the proviso to Article 1 of the Addenda to the Guarantee of Employees' Retirement Benefits Act (Act No. 7379). |
| (2) | Notwithstanding the amended provisions of Articles 8 (1), 15, 20 (1), and 25 (2) 2, the amount of retirement allowance, and the amount of benefits under a defined benefit plan, the amount of contributions under a defined contribution plan and an individual retirement pension plan prescribed in the amended provisions of Article 25 payable by an employer, which are applicable to a businesses employing no more than four ordinary employees shall be determined as follows: |
| 1. | The amount of retirement allowance, the amount of benefits under a defined benefit plan, the amount of contributions under a defined contribution plan and an individual retirement pension plan prescribed in the amended provisions of Article 25 payable by an employer, for the period from December 1, 2010, to December 31, 2012: 50/100 or more of the amount prescribed in the amended provisions of Articles 8 (1), 15, 20 (1) and 25 (2) 2; |
| 2. | The amount of retirement allowance, the amount of benefits under a defined benefit plan, the amount of contributions under a defined contribution plan and an individual retirement pension plan prescribed in the amended provisions of Article 25 payable by an employer, for the period after January 1: The amount prescribed in the amended provisions of Articles 8 (1), 15, 20 (1) and 25 (2) 2. |
| (3) | The parties to labor relationship shall not deteriorate existing working conditions for reasons of applying paragraph (1) or (2). |
Article 9 (Transitional Measures concerning Preferential Payment of Retirement Allowance)
| (1) | In cases of an employee who had retired before December 24, 1997, the retirement allowance for the period of continuous service on and after March 29, 1989, shall be the object of preferential payment, notwithstanding Article 12 (2). |
| (2) | In cases of an employee who had been employed before December 24, 1997, and retired on or after December 24, 1997, the amount obtained by adding the amount of retirement allowance for the period of continuous service from March 29, 1989, to December 23, 1997, and the amount of retirement allowance for the last three years of continuous service on and after December 24, 1997, shall be the object of preferential payment, notwithstanding Article 12 (2). |
| (3) | The amount of retirement allowance which becomes the object of preferential payment under paragraphs (1) and (2) shall be a prorated amount equal to the average wages earned for 30 days for each year of continuous service. |
| (4) | The amount of retirement allowance which becomes the object of preferential payment under paragraphs (1) and (2) shall not exceed the average amount of wages earned for 250 days. |
Article 10 (Transitional Measures concerning Retirement Allowance System)
The retirement allowance system established and the retirement allowance paid in advance under Article 34 (1) of the former Labor Standards Act as of December 1, 2005 on which date the Guarantee of Employees' Retirement Benefits Act (Act No. 7379) entered into force shall be deemed to have been established or paid in accordance with the Guarantee of Employees' Retirement Benefits Act (Act No. 7379). Article 11 (Transitional Measures concerning Individual Retirement Account)
The individual retirement accounts established under former Article 25 or 26 shall be deemed established under the amended provisions of Article 24 or 25. Article 12 Omitted.
Article 13 (Relationship with other Acts and Subordinate Statutes)
Where other Acts and subordinate statutes cite the former provisions of the Guarantee of Employees' Retirement Benefits as at the time this Act enters into force, it shall be deemed to have cited the relevant provisions of this Act in lieu of the former provisions, if provisions corresponding thereto in this Act exist.
ADDENDUM <Act No. 15664, Jun. 12, 2018>
This Act shall enter into force on July 1, 2018.
ADDENDUM <Act No. 17326, May 26, 2020>
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)