Party, Government to Gradually Mandate External Funding of Retirement Pensions... Plan Support Measures for SMEs

Promoting Fund-Type Plans... Expanding Professional Fund Managers
Checking Preparations for the Yellow Envelope Act Taking Effect on March 10
"Joint Report by the Ministry of Employment and Labor and the National Labor Relations Commission Planned for the 27th"

The government and the ruling party held a party-government meeting at the National Assembly Members' Office Building on the morning of the 23rd and agreed to revise the severance pay system within this year in order to improve retirement pension returns and protect benefit rights.

Han Jeongae, Policy Chair of the Democratic Party of Korea, and Kim Younghoon, Minister of Employment and Labor, are holding a consultative meeting between the party and the government at the National Assembly Members' Office Building on the 23rd to discuss employment and labor policies. Yonhap News

Representative Kim Jooyoung of the Democratic Party of Korea, who serves as secretary of the National Assembly’s Climate, Energy, Environment and Labor Committee, met with reporters immediately after the closed-door party-government meeting and said, "The Ministry of Employment and Labor presented its views on measures to promote fund-type retirement pensions, and these included licensing requirements, fund management systems, and supervision and oversight."

He continued, "There was also an explanation that, in line with the expansion of the Retirement Pension Fund for Small and Medium-sized Enterprises (SME Retirement Pension Fund), the government will increase professional staff at the Korea Workers' Compensation and Welfare Service to enhance fund management expertise," adding, "There was also an opinion that the Ministry of Employment and Labor, the Ministry of Economy and Finance, the Financial Services Commission, the Financial Supervisory Service, leading industry operators, and labor and management organizations will form and operate a working-level task force."

The party and the government also shared measures to promote mandatory external funding of retirement benefits. Representative Kim said, "For now, it is a plan to introduce the obligation in stages. We are also reviewing whether to apply it first to new employees in the public sector."

He went on, "There was an announcement from the government that it will prepare support measures for small businesses going forward." Representative Kim said, "Overall, it is important to first understand how much funding will be required for the SME Retirement Pension Fund support program," adding, "To secure the necessary funds, it will be necessary to review options such as transferring the program from the current Workers' Welfare Fund to the general account."

Additional tasks such as eliminating blind spots in retirement benefits will continue to be discussed together with social consultative bodies. Representative Kim said, "For blind spots such as workers employed for less than one year or specially employed workers, we will first conduct a fact-finding survey and then prepare a variety of alternatives through social consultative bodies such as the Economic, Social and Labor Council."

Earlier, on the 6th, labor, management, and the government reached their first agreement in about 20 years on restructuring the retirement pension system. To improve returns, they decided to promote a fund-type retirement pension system managed by experts, and to mandate external funding of retirement benefits at all workplaces so that severance pay is guaranteed even if a company goes bankrupt. Han Jeongae, Chair of the Policy Committee of the Democratic Party of Korea, said that day, "The party and the government will communicate closely and draw up and pass an amendment within this year."

Han Jeongae, Policy Committee Chair of the Democratic Party, and Kim Younghoon, Minister of Employment and Labor, are entering the National Assembly Members' Office Building on the 23rd to attend party-government consultations. Yonhap News

At the party-government meeting that day, they also checked the Ministry of Employment and Labor’s state of readiness ahead of the enforcement on March 10 of the so-called Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act). Representative Kim said, "The government announced that it will prepare a manual and operate an advisory body to support bargaining at worksites between original contractors and subcontractors," adding, "It also answered that dedicated teams at local labor offices will be operated so that they can actively guide the procedures for bargaining between original contractors and subcontractors."

Minister of Employment and Labor Kim Younghoon said, "If the enforcement decree on bargaining procedures and other matters is approved at the Cabinet meeting tomorrow (the 24th), we will, around the 27th, report jointly with the National Labor Relations Commission to the public so that the field can prepare for predictable bargaining."