Retirement Pension to be mandatory for all companies in Korea in 2022

On 27 August 2014, the Korean government announced a plan to make retirement pension system mandatory for all companies. The followings are main points of the plan.

1. The schedule of mandatory adoption

2016: companies with 300 or more workers
2017: companies with 100 or more
2018: companies with 30 or more
2019: companies with 10 or more
2022: all companies

2. Financial support for small-and-medium companies by introducing the retirement pension fund system for SMEs

– to be implemented in July 2015
– financial support for the pension in SMEs (companies with 30 workers or less)
– subsidy from the fund to pay half of the pension operation fees paid by an employer (the fee is 0.4% of the contribution)
– subsidy from the fund to pay 10% of the contribution by an employer for a worker with monthly salary of 1.4 million won or less

3. Temporary workers with working period of less than 1 year to be covered by retirement pay

– to be implemented in 2016
– workers with a labor contract for less than 1 year will be entitled to retirement pay which is currently only for workers with 1 year or longer service

Of course, these are just a plan at this moment and actual amendments of related laws would have to follow for them to materialize.