Financial Support for Retirement Security of Small and Medium Enterprise Workers to Jump Significantly

Pureun Seed, New Grants Established with Significant Expansion of Eligible Recipients

Double Budget Support This Year, Reflected in Next Year's Government Proposal

Ministry of Labor, Workers' Welfare Corporation, and Small Business Associati

Financial support for fund projects aimed at securing the retirement of workers in small and medium-sized enterprises (SMEs) will be significantly increased.

The Ministry of Employment and Labor (Minister Lee Jeong-sik) announced on the 11th that it plans to greatly expand financial support for the SME retirement pension fund, ‘Pureun Seed,’ starting next year.

Pureun Seed is a public retirement pension system operated by the Korea Workers' Compensation and Welfare Service since September 2022 to promote the introduction of retirement pensions in workplaces with fewer than 30 employees, where workers’ retirement preparation is insufficient.

This system provides various benefits to enable a win-win situation for both SMEs and workers.

On the 11th, a business agreement ceremony to promote the subscription expansion of Pureun Seed was held. (From the left: Oh Se-hee, President of the Korea Federation of Micro Enterprise; Lee Jeong-sik, Minister of Employment and Labor; Park Jong-gil, President of the Korea Workers' Compensation and Welfare Service)

On the 11th, a business agreement ceremony to promote the subscription expansion of the Small and Medium Enterprise Retirement Pension Fund System, Pureun Seed, was held at the Korea Federation of Micro Enterprise. Lee Jeong-sik, Minister of Employment and Labor (center), Park Jong-gil, President of the Korea Workers' Compensation and Welfare Service (right), and Oh Se-hee, President of the Korea Federation of Micro Enterprise, are showing the agreement document.

One of the obstacles to introducing retirement pensions in small-scale micro-businesses is the cost burden. Employers who introduce retirement pensions must pay a certain amount of reserves and fees to financial institutions annually.

However, joining Pureun Seed can reduce this burden. Pureun Seed supports employers by covering 10% of the workers’ retirement benefit contributions for three years and has fully exempted operating fees for five years since last April.

Next year, to lower the entry barrier for Pureun Seed and promote its expansion, the government plan includes a budget for financial support more than double that of this year, aiming to provide broader and deeper support to both employers and workers.

To this end, a new worker support fund will be established. Until now, financial support benefits were given only to employers, but they will be extended to workers as well to help secure retirement income. The worker support fund will have the same support period (3 years) and amount (10% of the contribution) as the employer support fund.

In addition, the scope of financial support will be expanded. Until this year, financial support benefits were provided only to workers with an average monthly wage below 2.42 million KRW (120% of the minimum wage), but starting next year, the benefits will be extended to workers earning less than 2.68 million KRW (130% of the minimum wage) per month.

Pureun Seed has also drastically improved the ‘complex introduction procedures,’ which have been cited as the biggest obstacle to introducing retirement pensions. Without the need to draft or report retirement pension regulations, workplaces can easily and quickly join by simply signing a standard contract with the Korea Workers' Compensation and Welfare Service. Furthermore, all procedures from system enrollment to contribution accumulation and management, and retirement benefit payment are computerized for user convenience.

According to a retirement pension system awareness survey conducted by the Korean Pension Association last April, the main obstacles to retirement pension policies were complex introduction procedures (30.3%), external reserve burdens (21.8%), and fee burdens (15.1%).

On the same day, Minister Lee Jeong-sik signed a ‘Business Agreement for the Expansion of Pureun Seed’ with the Korea Workers' Compensation and Welfare Service (Chairman Park Jong-gil) and the Korea Federation of Micro Enterprise (Chairman Oh Se-hee) at the federation’s headquarters. He then met with micro-enterprise owners, their workers, and staff from the Korea Workers' Compensation and Welfare Service to listen to difficulties regarding the introduction and operation of Pureun Seed and discuss directions for system development.

During the meeting, there was also time for dialogue about the background and advantages of joining Pureun Seed from the perspectives of SME representatives and workers.

At the business agreement ceremony, Minister Lee said, “I hope Pureun Seed, which has many advantages and benefits, spreads rapidly,” and added, “I hope the Korea Federation of Micro Enterprise will play a solid connecting role so that micro-enterprises and workers can fully enjoy the various benefits provided by Pureun Seed.”

At the subsequent meeting, the minister pointed out, “The government’s top priority is stabilizing people’s livelihoods, and firmly securing workers’ retirement is the final piece of the puzzle for livelihood stability,” and stated, “We will strive to reflect field voices in the system so that Pureun Seed can firmly establish itself as a system for retirement security.”