EMPLOYEE RETIREMENT BENEFIT SECURITY ACT

  • [Enforcement Date 01. Jul, 2018.] [Act No.15664, 12. Jun, 2018., Partial Amendment]
    [Enforcement Date 19. Jun, 2018.] [Presidential Decree No.28983, 19. Jun, 2018., Partial Amendment]

CHAPTER I General Provisions

Article 1 (Purpose)

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.

Enforcement Ordinance

Article 1 (Purpose)

The purpose of this Decree is to prescribe matters delegated by the Employee Retirement Benefit Security Act and those necessary for the enforcement thereof.

Article 2 (Definitions)

The definitions of terms used in this Act shall be as follows:

1. The term "employee" means an employee as defined in Article 2 (1) 1 of the Labor Standards Act;

2. The term "employer" means an employer as defined in Article 2 (1) 2 of the Labor Standards Act;

3. The term "wages" means wages as defined in Article 2 (1) 5 of the Labor Standards Act;

4. The term "average wages" means average wages as defined in Article 2 (1) 6 of the Labor Standards Act;

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 Scheme

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/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/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 simultaneouslyestablishesadefined 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/she can secure the loan with the benefits as collateral.

Enforcement Ordinance

Article 2 (Reasons for Offering Right to Receive Benefits as Collateral)

(1) “Cases where the reasons and conditions prescribed by the Presidential Decree, such as housing purchases, etc., are met” in the former part of paragraph (2) of Article 7 of the Act refers to any of the following cases:
1. Where a pension holder who did not own a house has purchased a house;
1-2. Where a pension holder who is a non-homeowner takes a responsibility for the tenancy deposit under Article 303 of the Civil Act or a security deposit under Article 3-2 of the Housing Lease Protection Act for residential purposes. In such cases, the number of such occurrences shall be limited to one time while the worker works in the same business or workplace (hereinafter referred to as "business");
2. Where a pension holder pays the medical care costs incurred for convalescence from illness or injury of a person falling under any of the following, which requires at least six months of convalescence:
(a) The pension holder himself/herself;
(b) The spouse of the pension holder;
(c) The family members dependent on the pension holder or the spouse of the pension holder;
3. Where a pension holder has received a decision for commencement of a rehabilitation proceeding under the Debtor Rehabilitation and Bankruptcy Act within the past five years from the date of offering collateral;
4. Where a pension holder has been declared bankrupt under the Debtor Rehabilitation and Bankruptcy Act within the past five years from the date of offering collateral;
4-2. Where a pension holder pays the college tuitions, wedding expenses, or funeral expenses of any of the following persons:
(a) The pension holder himself/herself;
(b) The spouse of the pension holder;
(c) The family members dependent on the pension holder or the spouse of the pension holder;
5. Where other reasons and conditions prescribed by the Ordinance of the Ministry of Employment and Labor, such as natural disasters, armed conflicts, etc. are met.
(2) “The extent prescribed by the Presidential Decree” in the former part of paragraph (2) of Article 7 of the Act refers to the extent set by the following criteria:
1. 50/100 of reserve per pension holder in cases under subparagraphs 1, 1-2, 2 through 4, and 4-2 of paragraph (1): 50/100 of each pension holder’s reserve;
2. in case of subparagraph (5) of Article 1, the extent to be noticed by the Minister of Employment and Labor in consideration of damages and losses incurred to a pension holder as a consequence of natural disasters, armed conflicts, etc.

Article 8 (Establishment, etc. 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/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/her continuous service period prior to his/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.

Enforcement Ordinance

Article 3 (Reasons for Interim Severance Payment)

(1) “Reasons prescribed by the Presidential Decree, such as housing purchases, etc.” in the former part of Article 8 (2) of the Act means any of the following cases:
1. Where an employee who did not own a house purchases a house in his/her own name;
2. Where an employee who did not own a house pays deposit money under Article 303 of the Civil Act, or deposit under Article 3-2 of the Housing Lease Protection Act, for residential purposes. In such cases, only once per employee shall be permitted in one business (hereinafter referred to as “business”);
3. Where an employee, his/her spouse or a dependent family member living together with a worker or his/her spouse under Article 50 (1) of the Income Tax Act requires six months or longer period of medical care due to an illness or injury;
4. Where an employee is declared bankrupt under the Debtor Rehabilitation and Bankruptcy Act within five years counting backward from the date of application for the interim severance payment;
5. Where an employee receives a decision to commence rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act within five years counting backward from the date of application for the interim severance payment;
6. Where wages become reduced as a result of implementing the wage peak system under Article 28 (1) 1 through 3 of the Enforcement Decree of the Employment Insurance Act;
6. Where an employer implements a system of reducing wages based on a particular age, length of consecutive service, or amount of wage through a collective agreement, employment rules, etc. on the condition of extending or guaranteeing the current full retirement age;
6-2. Where an employer has changed a worker’s contractual working hours by at least one hour a day or five hours a week under agreement with the worker, and the worker has agreed to continue to work for at least three months based on the changed contractual working hours;
6-3. If the severance pay of the worker is reduced due to a reduction of the working time pursuant to enactment of the revised Labor Standards Act, Act No. 15513 ;
7. Other cases falling under the reasons and conditions determined and announced by the Minister of Employment and Labor, such as when damage is inflicted by natural disasters, etc.
(2) If an employer settles severance payment before retirement due to the reasons specified in each subparagraph of paragraph (1), he/she shall preserve relevant documents proving the fact, until the day marking five years after the employee retires.

Article 9 (Payment of Retirement Allowances)

Where any employee retires from his/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, etc.)

(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 Retirement Pension Plan

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 concerning the selection of a retirement pension trustee;

2. Matters concerning participants;

3. Matters concerning the period of contribution;

4. Matters concerning the amount of benefits;

5. Matters concerning the securing of ability to pay benefits;

6. Matters concerning the types of benefits, eligibility requirements, etc. of recipients;

7. Matters concerning 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 concerning notification of the current state of operation;

9. Matters concerning 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 concerning 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.

Enforcement Ordinance

Article 4 (Matters to be Stipulated in Defined Contribution Retirement Pension Rules)

(1) “Other matters prescribed by the Presidential Decree” in subparagraph 11, Article 13 of the Act means the following matters:
1. Matters concerning calculation and payment of liability fees;
2. Matters concerning liability fees for carrying out operational management services under Article 28 of the Act (hereinafter referred to as “operational management services”) and asset management services under Article 29 of the Act (hereinafter referred to as “asset management services”);
3. Matters regarding methods and procedures for educating pension holders, etc.;
4. Matters on how the business will be managed, if there is a contract on operational management services with a multiple number of retirement pension trustees. In such cases, if a pension holder fails to designate an individual retirement pension plan account, matters regarding the designation of a retirement pension trustee to whom the benefits shall be transferred under Article 17 (5) of the Act, shall be included.
(2) A retirement pension trustee who calculates liability fees under paragraph (1) 1 shall consider the estimated amount of expected expenses for future benefits, the estimated amount of revenues, etc. to maintain financial balance in the long term, and the detailed standards shall be prescribed by the Ordinance of the Ministry of Employment and Labor.
(3) An employer shall pay liability fees regularly more than once every year.
(4) The fees under paragraph (1) 2 shall be borne by the employer.
(5) Detailed matters concerning the methods and procedures for educating pension holders, etc. under paragraph (1) 3 shall be prescribed by the Ordinance of the Ministry of Employment and Labor.
(6) An employer who makes a contract on operational management services with a multiple number of retirement pension trustees, shall select one of the retirement pension trustees as representative retirement pension trustee (hereinafter referred to as “secretariat”) and have it carry out the services specified in each item of Article 22 (1) 3.

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/her continuous service.

Article 16 (Securing, etc. 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 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/she shall also inform the result thereof to the representatives of employees, if it falls short of the minimum reserve.

(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.

Enforcement Ordinance

Article 5 (Minimum Level of Reserves Under Defined Benefit Retirement Pension Plan)

(1) “Ratio prescribed by the Presidential Decree” in the main sentence of Article 16 (1) of the Act, besides each subparagraph means the ratio of reserves to standard liability reserves, under Article 16 (1) of the Act (hereinafter referred to as “standard liability reserves”) and shall be classified as follows:
1. From July 26, 2012 to December 31, 2013:60/100;
2. From January 1, 2014 to December 31, 2015:70/100;
3. From January 1, 2016 to December 31, 2017:80/100;
4. January 1, 2018 and beyond:a ratio of not fewer than 80/100 prescribed by the Ordinance of the Ministry of Employment and Labor.
(2) “Ratio prescribed by the Presidential Decree” in the proviso of Article 16 (1) of the Act besides each subparagraph means if the working period in the business before the establishment of retirement pension plan pursuant to Article 14 (2) of the Act (hereinafter referred to as “past service period” in this paragraph);the ratio of reserves to standard liability reserves if the past working period is included in the duration, according to the ratio determined and announced by the Minister of Employment and Labor, based on number of years of past working period and differential rate by subscription period.

Enforcement Ordinance

Article 6 (Notification of Results of Financial Review)

(1) After comparing the amount of reserves calculated under Article 16 (2) of the Act and the minimum reserves under Article 16 (1) of the Act (hereinafter referred to as “minimum reserves”), a retirement pension trustee shall inform the employer in written form, whether there is any shortage in reserves, current state of reserves and contributions paid, whether a financial stabilization plan is established under Article 7 (2) 1, etc. Provided that if the amount of reserves is less than that of minium reference, the retirement pension trustee shall notify:to a labor union in written form if there is a union representing a majority of employees, and if there is no such union, to all employees in written form, or through internal bulletin board or internet.
(2) Forms necessary for the notification under paragraph (1) shall be determined and announced by the Minister of Employment and Labor.

Enforcement Ordinance

Article 7 (Criteria for Judging Shortage of Reserves and Applicable Solution)

(1) “Level prescribed by the Presidential Decree” in Article 16 (3) of the Act means 95/100 of minimum reserves:
(2) Pursuant to Article 16 (3) of the Act, an employer shall, if the amount of reserves falls short of the level specified in paragraph (1), resolve the shortage of reserves by taking the following measures:
1. The employer shall establish a concrete plan (hereinafter referred to as “financial stabilization plan”) containing measures to finance the amount of shortage, a contribution plan, etc. to resolve the shortage of reserves and thus, to achieve balance within three years, and shall preserve it for three years;
2. The employer shall, if there is a labor union representing a majority of employees, notify that labor union about the financial stabilization plan, and if there is no such labor union, notify all workers and the retirement pension trustee of the financial stabilization plan, within 60 days after the date when he/she is notified by the retirement pension trustee of the results of a financial review pursuant to Article 6;
3. The employer shall faithfully implement the financial stabilization plan, such as by paying contributions to make up for the shortage of reserves.

Article 17 (Types of Benefits, Eligibility Requirements of Recipients, etc.)

(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.

Enforcement Ordinance

Article 8 (Reasons for Exceptions in Payment of Full Benefits)

“Cases prescribed by the Presidential Decree, such as business bankruptcy” in the main sentence of Article 17 (2) of the Act means any of the following cases:
1. Where an employer has been declared bankrupt under the Debtor Rehabilitation and Bankruptcy Act;
2. Where an employer has received a decision for commencement of rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act;
3. Where an employer falls under subparagraph 2 or 3 of Article 5 (1) of the Enforcement Decree of the Wage Claim Guarantee Act as a result of verification under Article 16 (2) of the Act.;
4. Where the ratio of reserves to standard liability reserves is lower than the ratio specified in Article 5 (1). In such situation, even when the working period in the same business before the establishment of a retirement pension plan is included in the period of contribution, the ratio specified in Article 5 (1) shall be applied;
5. Where the following value is higher than the ratio determined and announced by the Minister of Employment and Labor:
(The total amount of retirement benefits paid to pension holders in the business, since business start date) / (The amount of reserves as of business start date+the total amount of contributions paid since business start date)
6. Other cases prescribed by the Ordinance of the Ministry of Employment and Labor, where paying full benefits may restrict other employees’ right to receive benefits.

Enforcement Ordinance

Article 9 (Reasons for Exceptions in Transferring to Individual Retirement Pension Plan)

“Reasons prescribed by the Presidential Decree, such as when a pension holder retires after the age of 55 and receives benefits” in the proviso of Article 17 (4) of the Act means any of the following cases:
1. Where a pension holder retires after age of 55 and then receives benefits;
2. Where a pension holder has to repay the amount of loans, etc., in security for benefits under Article 7 (2) of the Act. In such situation, the amount not transferred to the individual retirement pension plan account designated by the pension holder shall not exceed the amount of amount of redemption of the loan.
3. Where the amount of retirement benefits is not more than the amount determined by the Minister of Employment and Labor.

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.

Article18-2

CHAPTER Ⅳ Defined Contribution Retirement Pension Plan

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 concerning the allocation of contributions;

2. Matters concerning the payment of contributions;

3. Matters concerning the operation of reserves;

4. Matters concerning the methods of operating reserves, supply of information, etc.;

5. Matters concerning 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".

Enforcement Ordinance

Article 10 (Matters to be Stipulated in Defined Contribution Retirement Pension Rules)

(1) “Matters prescribed by the Presidential Decree” in Article 19 (1) 7 of the Act means the following matters:
1. Matters regarding the payment of fees for carrying out operational management services and asset management services;
2. Matters regarding the methods and procedures for educating pension holders, etc.
(2) The fees under paragraph (1) 1 shall be borne by the employer:Provided that fees incurred due to additional contributions which is stipulated to be paid by a pension holder, under 20 (2), shall be borne by the pension holder.
(3) Detailed matters regarding the methods and procedures for educating pension holders, etc., under paragraph (1) 2 shall be prescribed by the Ordinance of the Ministry of Employment and Labor.

Article 20 (Allocation, Payment, etc. 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/her own expense to his/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/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/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/her invested assets to his/her account of the individual retirement pension plan that he/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.

Enforcement Ordinance

Article 11 (Rate of Interest on Unpaid Contributions)

“Interest rates prescribed by the Presidential Decree” in the latter part of Article 20 (3) of the Act means interest rates classified as follows:
1. From the next day of the date set for payment of contributions until the 14th day (the extended date in cases where the date for payment is extended under agreement between the parties concerned) after the date when a reason for paying benefits, such as retirement of a pension holder, occurs:an annual interest rate of 10/100
2. From the next day of last date of the period specified in subparagraph 1, until the date when contributions are paid:an annual interest rate of 20/100.

Enforcement Ordinance

Article 12 (Reasons for Exception in Application of Interest on Delayed Payment)

“Reasons prescribed by the Presidential Decree” in Article 20 (4) of the Act means cases pursuant to any subparagraph of Article 18 of the Enforcement Decree of the Labor Standards Act.

Enforcement Ordinance

Article 13 (Reasons for Payment of Unpaid Contributions)

“Reasons prescribed by the Presidential Decree” in the main sentence of Article 20 (5) of the Act means cases where a pension holder retires from the relevant business.

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 him/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/her reserves early when a ground prescribed by Presidential Decree, such as housing purchases, occurs.

Enforcement Ordinance

Article 14 (Reasons for Interim Withdrawal in Defined Contribution Retirement Pension Plan)

“Reasons prescribed by the Presidential Decree, such as housing purchase” in Article 22 of the Act means any of the following cases:
1. Where Article 2 (1) 1, 1-2, 2, or 5 is applicable;
2. Where a pension holder is declared bankrupt pursuant to the Debtor Rehabilitation and Bankruptcy Act within five years counted retroactively from the date he/she applies for early withdrawal;
3. Where a pension holder receives a decision to commence individual rehabilitation procedures pursuant to the Debtor Rehabilitation and Bankruptcy Act within five years counted retroactively from the date he/she applies for early withdrawal.

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/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 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.

Enforcement Ordinance

Article 15 (Matters to be Stipulated in Standard Rules)

“Matters prescribed by the Presidential Decree” in subparagraph 1 B of Article 23 of the Act means the following matters:
1. The characteristics and the name that reflects such characteristics of Defined Contribution Retirement Pension Plan, set by standard rules;
2. Matters concerning the scope or characteristics of businesses eligible to join;
3. The methods of managing reserves, and a criteria for selection thereof. In such cases, if a pension holder does not give any management instruction, management methods and their selection criteria shall be included;
4. Matters concerning the reasons for which a withdrawal can be made, the procedures for withdrawal, etc.;
5. Matters concerning fees;
6. Other matters necessary for reasonable management of Defined Contribution Retirement Pension Plan, of which two or more employers are involved, and determined by the Minister of Employment and Labor.

Enforcement Ordinance

Article 16 (Matters to be Stipulated in Standard Contract)

“Matters prescribed by the Presidential Decree” in subparagraph 2 of Article 23 of the Act means the following matters:
1. Matters concerning the implementation of the standard rules under subparagraph 1 of Article 23 of the Act;
2. Matters concerning calculation and paymnet of costs in regards to the operation of Defined Contribution Retirement Pension Plan, of which two or more employers are involved;
3. Matters concerning the reasons and procedures, etc. for terminating or changing a contract on operational management services and asset management services;
4. Other matters necessary for guaranteeing pension holders’ right to receive benefits, determined and announced by the Minister of Employment and Labor.

Enforcement Ordinance

Article 16-2 (Subject to the establishment of Individual Retirement Pension Plan)

Under the article 24 (2) 3, "A person prescribed by the Presidential Decree, who needs to secure stable old-age incomes, such as a self-employed person" refers to the following persons ;
1. Self-employed
2. An employee who doesn't have a retirement benefit system in accordance with the Article 4 (1) of the Act ;
a. An employee with a continuous working period of less than one year
b. An employee s with an average of 4 weeks work less than 15 hours a week.
3. An employee subject to severance pay system under Article 8 (1) of the Act
4. A civil servant subject to the Public Service Pension Act
5. A soldier subject to the Military Pension Act
6. An employee subject to the Private School Teachers ' Pension Act
7. A special post office worker subject to the Act of the Independent States
[New Article 2017.4.18]

CHAPTER Ⅴ Individual Retirement Pension Plan

Article 24 (Establishment, Operation, etc. 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/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/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 concerning 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.

Enforcement Ordinance

Article 17 (Contribution Limits of Individual Retirement Pension Plan)

“Limit prescribed by the Presidential Decree” in the proviso of Article 24 (3) of the Act means 18 million won a year excluding lump-sum pensions, etc., paid by business where the employee previously worked, under a Retirement Benefit Scheme (the sum of all contributions in cases if there are more than one Individual Retirement Pension Plan accounts).

Enforcement Ordinance

Article 18 (Eligibility Requirements by Types of Benefit in Individual Retirement Pension Plan, and Interim Withdrawal)

(1) The eligibility requirements for recipients by type of benefit under an Individual Retirement Pension Plan under Article 24 (5) of the Act are classified as follows:
1. Annuity:This type of benefits is paid to pension holders aged 55 or older. In such cases, the duration of payment shall be five years or longer;
2. Lump-sum:This type of benefits is paid to pension holders aged 55 or older who want to receive lump-sum benefits.
(2) If a pension holder falls under any subparagraph of Article 14 (1), he/she may make an interim withdrawal of his/her reserves under an individual retirement pension plan pursuant to Article 24 (5) of the Act.

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/she shall obtain the consent of individual employees: Provided, That he/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/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/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.

Enforcement Ordinance

Article 19 (Special Cases for Businesses Employing Less Than Ten Workers)

(1) The eligibility requirements for recipients by type of benefit under an Individual Retirement Pension Plan under Article 25 of the Act are specified in each subparagraph of Article 17 (1) of the Act.
(2) Fees on contributions paid by an employer under Article 25 (2) 2 of the Act shall be borne by the employer, and fees on contributions paid additionally by a pension holder under subparagraph 3 of the same paragraph, shall be borne by the pension holder.
(3) “Reasons prescribed by the Presidential Decree” in the main sentence of Article 25 (3) of the Act means cases where a pension holder retires from the business.

CHAPTER Ⅵ Retirement Pension Trustees and Their Services

Article 26 (Registration of Retirement Pension Trustees)

Any person falling under any of the following subparagraphs who wishes to be a retirement pension trustee shall register him/herself with the Minister of Employment and Labor after meeting requirements prescribed by Presidential Decree, such as financial soundness, personnel and physical resource requirements:

1. An investment trader, investment broker, or collective investment business entity under the Financial Investment Services and Capital Markets Act;

2. An insurance company under subparagraph 6 of Article 2 of the Insurance Business Act;

3. A bank under Article 2 (1) 2 of the Banking Act;

4. The National Credit Union Federation of Korea under subparagraph 2 of Article 2 of the Credit Unions Act;

5. The Korean Federation of Community Credit Cooperatives under Article 2 (3) of the Community Credit Cooperatives Act;

6. The Korea Workers' Compensation and Welfare Service under Article 10 of the Industrial Accident Compensation Insurance Act (The objects of the retirement pension business of the Korea Workers' Compensation and Welfare Service shall be limited to businesses employing less than 30 ordinary employees);

7. Any other person corresponding to those under subparagraphs 1 through 6 and prescribed by Presidential Decree.

Enforcement Ordinance

Article 20 (Registration Requirements, etc. for Retirement Pension Trustees)

(1) “Requirements prescribed by the Presidential Decree, such as financial soundness and personnel and physical requirements” in the part besides each subparagraph of Article 26 of the Act means the following requirements:
1. Financial soundness requirements classified as follows shall be met:
A. A person falling under subparagraph 1 through 3 or 7 of Article 26 of the Act:the capital adequacy ratio under Article 10 (1) of the Act, in Structural Improvement of the Financial Industry (hereinafter referred to as “capital adequacy ratio” in this Article), shall be not less than the standard determined and announced by the Financial Services Commission under paragraph (2) by the same Article;
B. A person falling under subparagraph 4 or 5 of Article 26 of the Act:the capital adequacy ratio shall be not less than the standard applicable to whom with the most similar business or finacial structure, among those falling under any of subparagraphs 1 through 3 and 7 of Article 26 of the Act;
C. A person falling under subparagraph 6 of Article 26 of the Act:he/she shall have a legal ground in order to get contributions from a fund established thereof.
2. Retirement Pension Trustees shall have necessary personnel, such as those with expertise in operational management services or asset management services and computer specialists required to carry out services, as determined and announced by the Financial Services Commission:Provided that if some of the operational management services have been entrusted to another person pursuant to Article 28 (2) of the Act, he/she shall be deemed to have necessary personnel for the relevant services;
3. Retirement Pension Trustees shall have computer facilities and offices necessary for carrying out operational management services or asset management services, as determined and announced by the Financial Services Commission. In such cases, the computer facilities shall have back-up facilities to persistence maintenance of services in such situations when there is an accident, such as a power cut or a fire, and computer systems shall be built up in advance to ensure that any changes in the contents of the plan, etc. do not cause damage to pension holders.
(2) Notwithstanding the proviso of paragraph (1) 2, a retirement pension trustee who intends to carry out the services specified in Article 28 (1) 2 of the Act must have a pension accounting specialist who meets all of the following requirements, as determined and announced by the Financial Services Commission:
1. The person shall be an insurance actuary registered under Article 182 (1) of the Insurance Business Act;
2. The person shall have at least one year of experience of working in retirement pension services, lump-sum retirement trust services or retirement insurance services;
3. The person shall have completed a job training about pension plan designing and accounting the pension as determined by the Financial Services Commission.
(3) The Financial Services Commission shall determine and announce detailed standards concerning the requirements specified in paragraph (1) 2 and 3 and paragraph (2). In such cases, the trustees shall consult with the Minister of Employment and Labor in advance.
(4) “Persons prescribed by the Presidential Decree” in subparagraph 7 of Article 26 of the Act means those licensed to do trust business under the Capital Markets and Financial Investment Services Act.
(5) The Minister of Employment and Labor shall accept registration, unless there is an application for registration under Article 26 of the Act falls under any of the following subparagraphs:
1. Where a person who applies for registration does not fall under any subparagraph of Article 26 of the Act;
2. Where the requirements specified in paragraphs (1), (2), (3) are not met.

Article 27 (Cancellation 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/her registration as prescribed by Ordinance of the Ministry of Employment and Labor: Provided, That where it falls under subparagraph 1 or 2, he/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 cancelled shall not be eligible to register as a retirement pension trustee for two years from the date the registration is cancelled.

(4) A retirement pension trustee who has been subject to a disposition of cancellation of registration or applied for the revocation 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 cancelled pursuant to paragraph (1) or (3), he/she may order the retirement pension trustee whose registration is revoked or cancelled to transfer all or part of his/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.

Enforcement Ordinance

Article 21 (Measures to Protect Pension Holders in Case of Cancelation of Registration, etc.)

“Measures for protection of pension holders prescribed by the Presidential Decree” in Article 27 (4) of the Act means the following measures:
1. Notifying the employer and pension holders of the fact that the registration has been cancelled or terminated, and the details of measures to protect pension holders;
2. Compensation for the financial losses to the employer and pension holders caused by a termination or change of the contract on operational management services or asset management services;
3. Providing materials, etc. necessary to transfer reserves to another retirement pension trustee under Article 27 (5) of the Act, and to ensure the continuous operation of the retirement pension plan of the business and pension holders;
4. Other measures necessary to prevent unreasonable damage that might be done to employers and pension holders, determined by the Minister of Employment and Labor.

Article 28 (Awarding of Contract on Operational Management Services)

(1) Each employer or participant who intends toestablish 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.

Enforcement Ordinance

Article 22 (Scope of Operational Management Services)

(1) “Services prescribed by the Presidential Decree” in Article 28 (1) 5 of the Act means the following services:
1. Establishing and operating an Individual Retirement Pension Plan under Article 24 of the Act;
2. Providing education entrusted by an employer under Article 32 (2) of the Act;
3. The following services in cases where a retirement pension trustee is a secretariat:
A. Checking whether the ability to pay benefits is proven, and giving notification of the results under Article 16 of the Act;
B. Calculating contributions under Article 4 (1) 1;
C. Conveying an employer’s instructions about the selection of a retirement pension trustee that pays benefits if a reason for a payment, such as retirement, occurs to the retirement pension trustee;
D. Other services necessary for the stable and coherent management of the plan, such as signing up new pension holders and giving notification about the amount of reserves and management status, in cases where a contract on operational management services under a Defined Benefit Retirement Pension Plan is made, with a multiple number of retirement pension trustees.
(2) A retirement pension trustee which is not a secretariat shall cooperate with the secretariat, such as by providing materials necessary to carry out the services specified in paragraph (1) 3.

Enforcement Ordinance

Article 23 (Partial Entrustment, etc. of Operational Management Services)

(1) “Some services prescribed by the Presidential Decree” in Article 28 (2) of the Act means the services specified in Article 28 (1) 2 through 4 of the Act, and Article 22 (1) 2.
(2) “Requirements prescribed by the Presidential Decree, such as personnel and physical requirements” in Article 28 (2) of the Act means the detailed standards determined and announced by the Financial Services Commission pursuant to Article 20 (3).

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;

5. Paying benefits;

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/her employees or the participant as the insured or beneficiaries.

Enforcement Ordinance

Article 24 (Types of Contracts to Provide Asset Management Services)

“Insurance contract or trust contract prescribed by the Presidential Decree” in Article 29 (2) of the Act means an insurance that is managed through a special account under Article 108 of the Insurance Business Act, or a specified money trust contract under subparagraph 1 of Article 103 of the Enforcement Decree of the Capital Markets and Financial Investment Services Act, which meets all of the following requirements:
1. The amount of reserves shall exceed 150/100 of the amount of standard liability reserves, and the retirement pension trustee shall return the surplus to the employer if the employer demand such a return, pursuant to Article 16 (4) of the Act;
2. Benefits shall be paid in the event of a pension holder’s retirement;
3. A pension holder shall be allowed to directly claim benefits against the retirement pension trustee:Provided that a pension holder whose consecutive service period is less than a year may not be allowed to claim benefits, and the reserves shall revert to the employer;
4. Upon termination of the contract, the reserves shall be paid to the pension holders:Provided that reserves for pension holders whose consecutive service period is less than a year shall revert to the employer.

Article 30 (Provision of Operational Management Services)

(1) Each retirement pension trustee shall fulfill his/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.

Enforcement Ordinance

Article 25 (Management Method Guaranteeing Principal and Pay Interest, of Reserves Under Defined Contribution Retirement Pension Plans and Individual Retirement Pension Plans)

(1) “Management methods prescribed by the Presidential Decree, which guarantee principal and pay interest” in Article 30 (2) 4 of the Act means the following management methods:
1. The following management methods offered by a financial institution not falling short of the standards determined and announced by the Financial Services Commission with regard to credit rating, etc.:
A. Deposits and saving deposits handled by a bank under Article 2 (1) 2 of the Banking Act;
B. Insurance contracts handled by an insurance company under subparagraph 6 of Article 2 of the Insurance Business Act and guaranteeing the payment of principal and pay interest, such as by guaranteeing a minimum interest rate on reserves;
C. Contracts for which a financial investment business under Article 8 of the Capital Markets and Financial Investment Services Act, guaranteeing the payment of principal and pay interest, and contracts purchasing under a repurchase agreement under subparagraph 3 B of Article 85 of the Enforcement Decree of the same Act.
2. Deposits handled by a postal service office under the Postal Savings and Insurance Act;
3. Currency stabilization bonds of the Bank of Korea under Article 69 (1) of the Bank of Korea Act, state bonds and bonds for which the government guarantees the redemption of principal and interest;
4. Other management methods guaranteeing the redemption of principal and pay interest, determined and announced by the Financial Services Commission.
(2) If the Financial Services Commission intends to determine or change the standards referred to in paragraph (1) 1 and management methods specified in subparagraph 4, it shall consult with the Minister of Employment and Labor.

Enforcement Ordinance

Article 26 (Management Methods and Standards to Ensure Stable Management of Reserves)

(1) “Management methods and standards prescribed by the Presidential Decree, such as diversified investment” in Article 30 (2) 5 of the Act means the following management methods and standards:
1. Management methods- management methods falling under any of the following items:
A. Deposits and saving deposits handled by a bank under Article 2 (1) 2 of the Banking Act;
B. Among insurance contracts handled by an insurance company under subparagraph 6 of Article 2 of the Insurance Business Act, those which allow a return of reserves and are announced by the Financial Services Commission;
C. Stocks under Article 4 of the Capital Markets and Financial Investment Services Act, announced by the Financial Services Commission. In such cases, the stocks (excluding collective investment stocks under the Capital Markets and Financial Investment Services Act) shall not be those issued by the employer or anyone with interest, who is determined and announced by the Financial Services Commission;
D. Deposits handled by a postal service office under the Postal Savings and Insurance Act;
E. Other management methods necessary for the stable mid- and long-term management of reserves and determined and announced by the Financial Services Commission.
2. Standards- the standards listed shall be followed:
A. Except for the management method guaranteeing payment of principal and interest under each subparagraph of Article 25 (1) and the management method whose investment risk is lowered by diversified investment in securities, etc., which are publicly notified by the Financial Services Commission, among the management methods under the items of subparagraph 1, operation shall be implemented within the total investment limits prescribed by Ordinance of the Ministry of Employment and Labor. In such cases, the Financial Services Commission may determine and publicly notify different detailed investment limits for each retirement pension plan within the total investment limits prescribed by Ordinance of the Ministry of Employment and Labor;
B. In cases of a defined contribution retirement pension plan and an individual retirement pension plan, investments in the high-risk assets prescribed by the Ordinance of the Ministry of Employment and Labor shall be made, only in accordance with the method of collective investment under Article 6 (5) of the Capital Markets and Financial Investment Services Act. In such cases, the uplimit of the total investment in such high-risk assets shall not exceed the standard prescribed by the Ordinance of the Ministry of Employment and Labor;
B. Investments in the management methods specified in each item of subparagraph 1 shall be made within the investment limit determined and announced by the Financial Services Commission for each type of high-risk assets and within the limit of the total investment in those assets.
(2) If the Financial Services Commission announces the matters referred to in paragraph (1) 1 B, C and E and subparagraph 2 A, it shall consult with the Minister of Employment and Labor in advance.

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"):

1. He/she shall not be a person registered with the Minister of Employment and Labor pursuant to paragraph (2);

2. He/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/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/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/her solicitation services within the limit of six months:

1. Where he/she fails to satisfy each of the requirements prescribed in paragraph (1);

2. Where he/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/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 Acts and subordinate statutes and cause no harm to the sound trade order in providing the solicitation services and establish standards for providing solicitation services for such purpose.

(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 in providing solicitation services.

Enforcement Ordinance

Article 27 (Scope of Entrustment of Solicitation Business)

“Business prescribed by the Presidential Decree” in the part, besides the ones described in each subparagraph of Article 31 (1) of the Act, means the following business:
1. Business of explaining matters on a retirement pension plan and its operation to a person, who intends to set up or join a retirement pension plan (including persons who have established or joined a retirement pension plan);
2. Business of introducing or connecting an employer or a prospective pension holder to a retirement pension trustee;
3. Business of explaining, and providing information on the methods of managing reserves;
4. Business of conveying questions by employers or pension holders (including prospective pension holders) , as well as answers by a retirement pension trustee, etc.
5. Other matters necessary to solicit an employer to set up and an employee to join a retirement pension plan, determined by the Minister of Employment and Labor.

Enforcement Ordinance

Article 28 (Requirements for Retirement Pension Plan Solicitors)

(1) “Requirements prescribed by the Presidential Decree” in Article 31 (1) 2 of the Act mean the following requirements:
1. A retirement pension plan solicitor shall be a person who is not an employee of a retirement pension trustee, and a person who is entrusted with solicitation business under a written contract made with a retirement pension trustee;
2. A retirement pension plan solicitor shall be a person who falls under those described in any of the following subparagraphs, and shall have completed the training course determined by the Minister of Employment and Labor. In such cases, detailed matters concerning the training course and completion thereof are shown in Table 1:
A. An insurance solicitor or an individual insurance agency that is registered with the Financial Services Commission under Articles 84 and 87 of the Insurance Business Act and has at least one year of experience in the relevant field;
B. An investment solicitor who is registered with the Korea Financial Investment Association under Article 51 of the Capital Markets and Financial Investment Services Act and has at least one year of experience in the relevant field;
C. Other persons deemed by the Minister of Employment and Labor to have expertise in retirement pension plans.
(2) The training under paragraph (1) 2 shall be entrusted to an institution that has the manpower, facilities and equipment designated by the Minister of Employment and Labor, and necessary matters concerning the completion, etc. of the training course shall be determined by the Minister of Employment and Labor.
(3) A retirement pension trustee shall have a retirement pension plan solicitor (hereinafter referred to as “retirement pension plan solicitor”) registered under Article 31 (2) of the Act receive the refresher training specified in Table 2 every two years-within six months, beginning from the date fulfilling two years after the date of registration.

Enforcement Ordinance

Article 29 (Entrustment of Solicitor Registration Business)

(1) Pursuant to the latter part of Article 31 (2) of the Act, the Minister of Employment and Labor may select an institution from among those that have the manpower, facilities and equipment designated by the Minister of Employment and Labor and are designated by the Financial Services Commission according to the procedures determined by the Minister of Employment and Labor, and entrust it with registration of retirement pension plan solicitors.
(2) The period during which registration of solicitors may be entrusted under paragraph (1) may be determined by the Minister of Employment and Labor, but shall not exceed three years.

Enforcement Ordinance

Article 30 (Matters to be Observed by Retirement Pension Plan Solicitors)

(1) A retirement pension plan solicitor shall not engage in any of the following conduct pursuant to Article 31 (7) 2 of the Act:
1. Performing solicitation business using a name other than “retirement pension plan solicitor” or in the name of any other retirement pension plan solicitor;
2. Performing solicitation business based on false information, providing information different from facts or not providing important information;
3. Performing business beyond the scope of entrusted solicitation business under Article 27;
4. Making a contract for entrustment of solicitation business with two or more retirement pension trustees;
5. Using information, etc., learned while performing solicitation business for his/her own benefit or the benefit of a third person;
6. Making a contract on behalf of the retirement pension trustee that has entrusted the solicitation business or an employer, etc., who are due to join the plan;
7. Receiving money, securities and other things of property value from an employer or a pension holder who has set up or intends to set up a retirement pension plan;
8. Offering or promising to offer special benefits under Article 33 (4) 2 of the Act to an employer or a pension holder who has set up or intends to set up a retirement pension plan, or any interested person;
9. Transmitting instructions on the management methods of reserves from employers or pension holders
10. Other conduct determined and announced by the Minister of Employment and Labor in order to protect employers and pension holders and maintain sound order in transactions.
(2) Pursuant to Article 31 (7) 2 of the Act, a retirement pension plan solicitor shall, when performing solicitation business, display in his/her office a sign or certificate indicating the fact that he/she is entrusted with solicitation business or produce it to the other party, and inform the employer, etc., of matters necessary to protect employers and pension holders and maintain sound order in transactions and determined and announced by the Minister of Employment and Labor, such as the name of the retirement pension trustee entrusting the solicitation business.
(3) The Financial Services Commission shall determine and announce detailed standards relating to each subparagraph of paragraph (1) and paragraph (2) after consultation with the Minister of Employment and Labor.

CHAPTER Ⅶ Duties and Supervision

Article 32 (Liabilities of Employers)

(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)

(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)

(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/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)

(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.

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/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.

Enforcement Ordinance

Article 38 (Measures to be Taken by Employer in Case of Abolition of Retirement Pension Plan)

“Measures prescribed by the Presidential Decree” in Article 38 (2) of the Act means the following measures:
1. The employer shall submit an abolition report containing the following matters to the Minister of Employment and Labor within one month after the date of abolishing the retirement pension plan:
A. A consent of the workers’ representative to the abolition of the retirement pension plan under Article(4) 3;
B. Reasons for the abolition of the retirement pension plan and the date of abolition;
C. Reserves and unpaid contributions of the relevant business calculated based on the date of abolition of the retirement pension plan (referring to a reserve shortfall compared to the amount obtained under Article 16 (1) 2 of the Act in cases of a defined benefit retirement pension plan, and an amount including interest on delayed payment of contributions in cases of a defined contribution retirement pension plan);
D. Measures to resolve unpaid contributions, such as the expected date of payment thereof (limited to a defined contribution retirement pension plan).
2. The employer shall notify the pension holders of the following matters:
A. Matters specified in subparagraph 1 C;
B. Benefit statements and payment procedures;
C. A period subject to the interim settlement under Article 40;
D. Measures to resolve unpaid contributions, such as the expected date of payment thereof (limited to a defined contribution retirement pension plan).
3. The employer shall pay unpaid contributions within 14 days after the date of abolishing the retirement pension plan and have the retirement pension trustee pay benefits.

Enforcement Ordinance

Article 39 (Basic Services to be Maintained in Case of Suspension of Retirement Pension Plan)

“Basic services prescribed by the Presidential Decree” in Article 38 (3) of the Act means services classified as follows:
1. The following services in cases of an employer:
A. Publicly notifying the pension holders of reasons for the suspension, the date of suspension, a resumption schedule, measures to handle the suspension period, such as a plan to pay unpaid contributions if there are unpaid contributions, and so on;
B. Providing education for pension holders under the former part of Article 32 (2) of the Act;
C. Measures necessary to carry out the services prescribed by Acts and subordinate statutes, etc., in regard to claims for payment of benefits, management of reserves, etc., even in the event of suspension of the operation of a retirement pension plan;
D. Other services determined by the Minister of Employment and Labor in order to maintain the continuity of a retirement pension plan and protect pension holders.
2. The following services in cases of a retirement pension trustee:
A. Paying benefits upon retirement, etc. of pension holders;
B. Providing education for pension holders entrusted under the latter part of Article 32 (2) of the Act;
C. Services prescribed by Acts and subordinate statutes and the contracts on operational management services and asset management services in regard to payment of benefits, management of reserves, notification of management status, etc.;
D. Other services determined by the Minister of Employment and Labor in order to maintain the continuity of a retirement pension plan and protect pension holders.

Enforcement Ordinance

Article 40 (Period Subject to Interim Settlement in Case of Abolition of Retirement Pension Plan)

If benefits are deemed to be paid in the interim settlement under Article 38 (4) and (5) of the Act, the amount of interim payments (limited to a defined benefit retirement pension plan) and the period subject to the interim settlement are classified as follows:
1. In cases of a defined benefit retirement pension plan:the amount of interim payments shall be calculated by proportionally dividing the amount of reserves accumulated by each business among the pension holders in consideration of their consecutive service periods, average wages and the benefit levels under subparagraph 4 of Article 13 of the Act, and the period subject to the interim settlement shall be calculated based on the amount of interim payments;
2. In cases of a defined contribution retirement pension plan and an individual retirement pension plan under Article 25 (1) of the Act:the period subject to the interim settlement shall be from the day each pension holder joined the retirement pension plan until the last day of a period corresponding to the contributions paid by the employer.

Article 39 (Business Cooperation)

If the Minister of Employment and Labor deems it necessary to implement this Act, he/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 toappear 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/she may authorize his/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/her authority and produce it to the related persons.

Article 41 (Hearings)

The Minister of Employment and Labor shall hold a hearing if he/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.

Enforcement Ordinance

Article 41 (Entrustment and Delegation of Authority)

(1) The Minister of Employment and Labor shall entrust the following authority to the Financial Services Commission pursuant to Article 42 (1) of the Act:
1. Registration of a retirement pension trustee under Article 26 of the Act;
2. Cancellation of registration of a retirement pension trustee and issuance of an order for transfer of services under Article 27 of the Act;
3. Cancellation of registration of a retirement pension plan solicitor and suspension of business under Article 31 (6) of the Act;
4. Issuance of a corrective order and an order for transfer of services under Article 36 (1) and (2) of the Act (including requests for reporting and submission of documents under Article 40 of the Act to the extent necessary for the exercise of the relevant authority);
5. Hearings under Article 41 of the Act;
6. Imposition and collection of fines for negligence under Article 48 of the Act (limited to imposition and collection of fines for negligence against retirement pension trustees).
(2) The Financial Services Commission may determine and announce detailed standards necessary for performing the duties specified in paragraph (1) 1 though 4. In such cases, it shall consult with the Minister of Employment and Labor in advance.
(3) If the Financial Services Commission cancels registration of a retirement pension plan solicitor and suspends his/her business pursuant to paragraph (1) 3, it shall inform the Minister of Employment and Labor of the details and grounds.
(4) The Minister of Employment and Labor shall entrust the following authority to the Governor of the Financial Supervisory Service pursuant to Article 42 (1) of the Act:
1. Approval of a standard contract under subparagraph 2 of Article 23 of the Act;
2. Check for violations of the matters to be observed by retirement pension plan solicitors under Article 31 (7) of the Act.
(5) The Governor of the Financial Supervisory Service shall, if a retirement pension plan solicitor is found to have violated the matters to be observed as a result of check under subparagraph (4) 2, inform the Financial Services Commission of the details of such violation.
(6) The Minister of Employment and Labor may, if deemed necessary in order to protect employers and pension holders and maintain sound order in transactions, request the Governor of the Financial Supervisory Service to make a check under paragraph (4) 2, and after making the check, the Governor of the Financial Supervisory Service shall submit the results in writing to the Minister of Employment and Labor.
(7) The Minister of Employment and Labor shall delegate the following authority to the heads of local employment and labor offices pursuant to Article 42 (1) of the Act:
1. Receipt of retirement pension rules reported under Articles 13 and 19 of the Act;
2. Issuance of a corrective order and an order for suspension of operation of a retirement pension plan under Article 35 of the Act;
3. Request for reporting, submission of documents or physical presence under Article 40 (1) of the Act and questioning and investigation under paragraph (2) of the same Article;
4. Imposition and collection of fines for negligence under Article 48 of the Act (limited to imposition and collection of fines for negligence against employers);
5. Receipt of a statement of reasons for selection or change of a retirement pension trustee under the latter part of subparagraph 2 of Article 31;
6. Receipt of a report on abolition of a retirement pension plan under subparagraph 1 of Article 38.
(8) The Financial Services Commission shall entrust authority over the measures specified in Article 36 (3) 1 of the Act (excluding demands for dismissal of an employee) to the Governor of the Financial Supervisory Service pursuant to Article 42 (2) of the Act.

CHAPTER Ⅸ Penal 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 is in contravention of the liability 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:

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;

2. A person who violates Article 31 (7);

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 concerning the relevant affairs to prevent such violation.

Article 48 (Administrative Fines)

(1) Any person falling under any of the following subparagraphs shall be punished by 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 is in contravention of the liability prescribed in Article 32 (3) 2;

3. A retirement pension trustee who is in contravention of the liability 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.

Enforcement Ordinance

Article 42 (Criteria for Imposition of Fines for Negligence)

The criteria for imposition of fines for negligence under Article 48 (1) and (2) of the Act are shown in Table 3.

Enforcement Ordinance

Article 43 (Management of Unique Identifying Information)

The Minister of Employment and Labor (including persons to whom the authority of the Minister of Employment and Labor is entrusted or delegated pursuant to Article 41), an employer, a retirement pension trustee, a person entrusted with operational management services by a retirement pension trustee under Article 28 (2) of the Act or an institution entrusted with registration of retirement pension plan solicitors under the latter part of Article 31 (2) of the Act may manage data containing resident registration numbers under subparagraph 1 of Article 19 of the Enforcement Decree of the Personal Information Protection Act or foreigner registration numbers under subparagraph 4 of the same Article, if it is inevitable in order to perform the following duties:
1. Duties concerning the registration of a retirement pension trustee under Article 26 of the Act;
2. Duties concerning the cancellation of registration of a retirement pension trustee and a transfer order under Article 27 of the Act;
3. Duties concerning the signing of a contract on operational management services under Article 28 of the Act;
4. Duties concerning the signing of a contract on asset management services under Article 29 of the Act;
5. Duties necessary for the provision of operational management services under Article 30 of the Act;
6. Duties concerning the entrustment of solicitation business, the registration of retirement pension plan solicitors, the cancellation of registrations, the suspension of solicitation business, etc., under Article 31 of the Act;
7. Duties necessary for the provision of education entrusted by an employer under the latter part of Article 32 (2) of the Act;
8. Duties concerning the submission of the performance results of a retirement pension plan under Article 33 (6) of the Act;
9. Duties concerning supervision over employers under Article 35 of the Act;
10 Duties concerning supervision over retirement pension trustees under Article 36 of the Act;
11. Duties concerning requests for provision of information on financial transactions under Article 37 of the Act;
12. Duties concerning cooperation under Article 39 of the Act;
13. Duties concerning reporting and investigation under Article 40 of the Act.

Enforcement Ordinance

Article 44 (Review of Regulations)

With regard to the following, the Minister of Employment and Labor shall take measures of improvement, etc. after examining appropriateness of the following matters every three years (referring to the period until the day before each second anniversary) from the following dates:
1. The minimum levels of reserves against defined benefit retirement pension plans under Article 5: January 1, 2017;
2. Notification of financial verification results under Article 6: January 1, 2017;
3. Criteria for judging shortage in reserves and solutions under Article 7: January 1, 2017;
4. Requirements for retirement pension plan solicitors under Article 28: January 1, 2017;
5. Matters to be observed by retirement pension plan solicitors under Article 30: January 1, 2017
[This Article Newly Inserted by Presidential Decree No. 25840, Dec. 9, 2014]

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

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