Party, Government to Gradually Mandate External Funding of Retirement Pensions... Aim to Pass Amendment Within This Year (Comprehensive)

Invigorating Fund-Type Pensions... Expanding Professional Fund Managers
Reviewing Preparations for Enforcement of the Yellow Envelope Act on March 10
"Joint Briefing by the Labor Ministry and the Central Labor Relations Commission Planned for the 27

At a party-government consultative meeting held at the National Assembly Members' Office Building on the morning of the 23rd, Han Jeongae, Chair of the Policy Committee of the Democratic Party of Korea, said, "It is essential to gradually expand coverage of the Korea Workers' Compensation & Welfare Service Retirement Pension Fund (the Small and Medium-Sized Enterprise Retirement Pension Fund, or SME Retirement Pension Fund) to workplaces with 300 or fewer employees and to make external funding of retirement benefits mandatory," adding, "The party and the government will communicate closely and prepare and pass an amendment within this year."

Chair Han said, "On the 6th, we achieved a historic joint declaration to strengthen the functions of retirement pensions," and evaluated it as "an encouraging achievement that, 20 years after the introduction of the system, has mandated the activation of pensions and external funding."

Han Jeongae, Chair of the Policy Committee of the Democratic Party of Korea, and Kim Younghun, Minister of Employment and Labor, held a party-government consultative meeting at the National Assembly Members' Office Building on the 23rd to discuss employment and labor policy. Yonhap News

Representative Kim Jooyoung, the Democratic Party of Korea secretary on the National Assembly Climate, Energy, Environment and Labor Committee, met with reporters immediately after the closed-door party-government consultative meeting and explained, "The Ministry of Employment and Labor presented its views on measures to invigorate fund-type retirement pensions, which included licensing requirements, fund management systems, and matters related to supervision and oversight."

He added, "There was also an explanation that, in line with the expansion of the SME Retirement Pension Fund, the Korea Workers' Compensation & Welfare Service will increase its pool of professionals to enhance expertise in fund management," and said, "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, along with leading industry operators and labor-management organizations, will form and operate a working-level task force."

The party and the government also shared measures to promote the mandatory external funding of retirement benefits. Representative Kim said, "For now, the plan is to introduce the mandate in stages. We are also reviewing whether to give priority application to new hires in the public sector, among other options."

He continued, "There was an announcement from the government side that it will prepare support measures for micro and small workplaces going forward." Representative Kim said, "Overall, it is important first to determine how much funding will be required for the SME Retirement Pension Fund support program," and added, "To secure financial resources, it will be necessary to review options such as transferring the project from the current Workers' Welfare Fund to the general account."

Additional tasks such as closing gaps in coverage for retirement benefits are to be discussed on an ongoing basis with social dialogue bodies. Representative Kim said, "For blind spots such as workers who have worked for less than one year or those in special employment types, we will first conduct a fact-finding survey and then prepare a range of alternatives through social dialogue bodies such as the Economic, Social and Labor Council."

Earlier, on the 6th, labor, management, and the government reached their first agreement in more than 20 years on restructuring the retirement pension system. They decided to promote fund-type retirement pension schemes managed by professionals to improve returns, and to make it mandatory for all workplaces to externally fund retirement benefits so that retirement pay can be guaranteed even if a company goes bankrupt.

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

At the party-government consultative meeting that day, they also reviewed the Ministry of Employment and Labor's state of preparations ahead of the enforcement on March 10 of the so-called Yellow Envelope Act (the amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act). Chair Han said, "To prevent confusion in bargaining procedures that may arise in the early stages of the law's enforcement, please make every effort to prepare the enforcement decree and interpretive guidelines," emphasizing, "In particular, the Labor Relations Commission must make prior determinations on who qualifies as an employer so as to prevent unnecessary legal disputes."

Representative Kim explained, "The government announced that it will prepare manuals and operate an advisory body to support bargaining between principal contractors and subcontractors in the field," and added, "It also responded that dedicated teams at local labor offices will actively guide the bargaining procedures between principal contractors and subcontractors."

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