All Businesses Required to Reserve Retirement Benefits Outside Company by 2030

All businesses will be required to separately deposit their employees' severance and retirement benefits into financial institutions outside the company.

The Ministry of Employment and Labor has decided to mandate the external reserve of retirement benefits, starting with businesses with 100 or more employees in 2028, those with 10 or more employees in 2029, and expanding to all businesses with fewer than 10 employees by 2030.

The measure aims to prevent wage and severance arrears by separating company funds from retirement benefits. Last year, 41 percent of unpaid wages were accounted for by unpaid severance benefits.

In addition, a fund-type retirement pension system will be newly introduced, allowing private financial companies to pool and manage retirement pensions from multiple businesses on their behalf.

The government plans to draft a bill to amend the law next month and push for its passage in the National Assembly within the year.
※ Please note: This article was translated by AI and may contain errors.