EMPLOYEE RETIREMENT BENEFIT SECURITY ACT [See entire ACT]
CHAPTER Ⅶ Duties and Supervision
- Article 32 (Liabilities of Employers)
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(1) Each employer shall observe Acts and subordinate statutes and rules for retirement pension plans and shall faithfully carry out the duties under this Act concerning 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/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:
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.
Enforcement Ordinance
- Article 31 (Duties of Employers For Stable Operation of Retirement Pension Plans)
“Matters prescribed by the Presidential Decree” in Article 32 (1) of the Act means the following matters：
1. Deleted. <2019. 10. 29.>
2. An employer shall select a retirement pension trustee, comprehensively considering its capabilities and expertise in the overall aspects of a retirement pension plan, including carrying out operational management services and asset management services and providing related services. In such cases, the employer of a business ordinarily employing 300 workers or more shall, when he/she reports retirement pension rules under Articles 13 and 19 of the Act or selects or changes his/her retirement pension trustee, submit a statement of reasons for such selection and change to the Minister of Employment and Labor；
3. An employer shall provide the retirement pension trustee with materials, such as collective agreements, employment rules, labor contracts and payroll records, which are necessary to calculate contributions and check whether the ability to pay benefits is secured under Article 16 of the Act and other things；
4. If an employer entrusts the retirement pension trustee to provide education to the pension holders pursuant to the latter part of Article 32 (2) of the Act, he/she shall cooperate, such as by ensuring that collective education can be provided.
Enforcement Ordinance
- Article 32 (Education for Retirement Pension Holders)
(1) “Matters prescribed by the Presidential Decree, such as the operating status of the retirement pension plan of the business concerned” in the former part of Article 32 (2) of the Act means matters classified as follows：
1. The following general matters concerning retirement pension plans：
A. Matters concerning types of benefits, the characteristics of each type of retirement pension plan, such as eligibility requirements and benefit amounts, and differences therein；
B. Matters concerning the operation of the retirement pension plan of the business concerned, such as secured loans, early withdrawal and interest on delayed payment of contributions；
C. Matters concerning wages, etc. on the basis of which benefits or contributions are calculated；
D. Matters concerning the procedures for paying benefits in the event of retirement and the transfer of reserves to an individual retirement pension plan；
E. Matters concerning taxation, such as tax on pension income and tax on retirement income；
F. Methods of handling affairs in the case of suspension or abolition of the retirement pension plan of the business concerned；
G. Matters concerning the general principles of asset and liability management taking account of each pension holder’s earnings, assets and debts, age, years of consecutive service, etc., and the importance of planning for old age.
2. The following matters in cases of setting up a defined benefit retirement pension plan：
A. The status of contributions paid over the past three years；
B. Standard benefit amounts by type of benefit；
C. The ratio of reserves to the minimum reserves as of the end of the preceding business year；
D. In cases where a financial stabilization plan is drawn up, the plan and its implementation status；
E. Other matters concerning the status of management of reserves, management targets, etc.
3. The following matters in cases of setting up a defined contribution retirement pension plan：
A. The level of contributions for the employer, the date of contribution and the status of contributions paid；
B. Matters concerning the standard rules and standard contract in cases of a defined contribution retirement pension plan involving two or more employers under Article 23 of the Act；
C. Matters concerning the investment principles implemented to ensure the stable management of reserves, such as diversified investment；
D. Matters concerning the return structures by reserve management method, such as collective investment securities, basis sales price, investment risks, fees, etc., proposed by the retirement pension trustee.
(2) If an employer provides education about the matters specified in paragraph (1) 3 C and D, he/she shall cooperate with the retirement pension trustee.
Enforcement Ordinance
- Article 33 (Conduct Prohibited for Employers)
“Conduct prescribed by the Presidential Decree” in Article 32 (3) 2 of the Act means the following conduct：
1. Deliberately omitting or falsifying materials needed to carry out operational management services or asset management services and providing them to the retirement pension trustee；
2. Requesting the retirement pension trustee to provide services of economic value other than the supplementary services prescribed in the contractual terms and conditions or receiving such services；
3. Requesting the retirement pension trustee to purchase goods, etc., in return for making a contract with it；
4. Requesting the retirement pension trustee to propose fixed returns on a management method which does not provide fixed returns or receiving such a proposal；and
5. Failing to draw up a financial stabilization plan or give notification of it.
- Article 33 (Liabilities of Retirement Pension Trustees)
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(1) Each retirement pension trustee shall observe this Act and shall provide his/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/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/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.
Enforcement Ordinance
- Article 34 (Conduct Prohibited for Retirement Pension Trustees)
(1) “Conduct prescribed by the Presidential Decree” in Article 33 (3) 4 of the Act means the following conduct：
1. Using information learned in relation to carrying out services, such as the employer’s or pension holder’s management instructions, etc., for his/her own benefit or the benefit of a third person；
2. Demanding the signing of a retirement pension contract on conditions that the employer, the pension holder or any interested person is given benefits in terms of financial transactions, such as extending existing loans or providing new loans；
3. Forcing the employer or pension holder to choose a particular management method；
4. Providing the employer or pension holder with judgments which are conclusive or have no rational ground, on a rise or fall in the value of a particular management method；
5. Proposing remarkably favorable terms away from commonly used ones with regard to the methods of managing reserves, etc.；
6. Applying different interest rates, etc., on management methods, for which the retirement pension trustee guarantees the payment of principal and interest, depending on each employer or pension holder, without any reasonable ground；
7. Proposing fixed returns on a management method which does not provide fixed returns to the employer or pension holder.
(2) Specific standards under each subparagraph of paragraph (1) shall be determined and announced by the Financial Services Commission after consultation with the Minister of Employment and Labor.
Enforcement Ordinance
- Article 35 (Specific Details of Special Benefits)
(1) “Special benefits prescribed by the Presidential Decree” in Article 33 (4) 2 of the Act means the following benefits：
1. Offering money and goods to induce the signing of a contract or maintain a contract；
2. Discounting fees not based on the contractual terms and conditions；
3. Paying all or part of the costs that shall be borne by the pension holder or employer；
4. Paying interest on loans made by the relevant retirement pension trustee to the pension holder or employer on his/her behalf；
5. Providing supplementary services of economic value which are not based on the contractual terms and conditions；
6. Other economic benefits equivalent to the benefits specified in subparagraphs 1 through 5 and determined and announced by the Financial Services Commission.
(2) Specific standards for the benefits specified in each subparagraph of paragraph (1) shall be determined and announced by the Financial Services Commission after consultation with the Minister of Employment and Labor.
Enforcement Ordinance
- Article 36 (Education for Individual Retirement Pension Holders)
(1) “Matters prescribed by the Presidential Decree, such as the operating status of the retirement pension plan of the business concerned” in Article 33 (5) of the Act means matters classified as follows：
1. In cases of an individual retirement pension plan under Article 24 (2) of the Act：matters specified in Articles 17 and 18, Article 32 (1) 1 E and G and Article 32 (1) 3 C and D of this Decree；
2. In cases of an individual retirement pension plan under Article 25 of the Act：matters specified in Article 32 (1) 1 and 3 of this Decree.
(2) Education methods under paragraph (1) shall be prescribed by the Ordinance of the Ministry of Employment and Labor.
- Article 34 (Liabilities, etc. of Government)
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(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)
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(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)
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(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/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/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.
Enforcement Ordinance
- Article 37 (Supervision by Financial Services Commission over Retirement Pension Trustees)
(1) “Services prescribed by the Presidential Decree” in the part other than each subparagraph of Article 36 (3) of the Act means operational management services and asset management services.
(2) The Financial Services Commission may determine and announce detailed standards necessary for the supervision of the services specified in paragraph (1). In such cases, it shall consult with the Minister of Employment and Labor in advance.
- Article 37 (Request, etc. for Financial Transaction Information)
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(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;
3. Purpose of use;
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.
