Pension Savings, 50 Million KRW Deposit Insurance Limit on Accident Insurance Payouts

'Enforcement Decree of the Depositor Protection Act' Amendment Approved at Cabinet Meeting
Applying 50 Million KRW Protection Limit to Pension Savings, Accident Insurance, and SME Retirement Pension Funds
Mutual Finance Sectors Including Shinhyup, Suhyup, and Saemaeul Geumgo Also in Final Amendment Stage

The amendment to the "Depositor Protection Act Enforcement Decree," which applies a separate deposit protection limit of 50 million won for pension savings, accident insurance payments, and small and medium-sized enterprise retirement pension funds, was approved at the Cabinet meeting on the 10th.

Since February 2015, a protection limit of 50 million won has been applied separately from general deposits held by depositors at the same financial institution for deposits of defined contribution (hereinafter DC) and individual retirement pension (hereinafter IRP) plans.

This amendment includes provisions to apply a separate deposit protection limit of 50 million won, distinct from general deposits, for pension savings (trusts and insurance), accident insurance payments, and small and medium-sized enterprise retirement pension funds, each of which has a strong social security character.

An official from the Korea Deposit Insurance Corporation stated, "Through this, people can prepare for their retirement more securely with pension savings (trusts and insurance) and small and medium-sized enterprise retirement pension funds, and accident insurance payments will provide stronger protection for depositors who suffer unexpected accidents even in the event of insurer insolvency. This is expected to further strengthen trust in the financial industry."

The amendment to the enforcement decree is scheduled to be promulgated and enforced immediately in October. Amendments to the enforcement decrees of individual laws containing the same provisions for mutual financial institutions handling pension savings deductions and general deduction products are also expected to be completed soon.