This study aims to lay the groundwork for the pension system that the Korean government is planning to implement during the 5th five-year socio-economic development plan.
Under the current retirement benefits system of Korea, introduced by the Labor Standards Act enacted in 1953, employers pay retiring workers the sum of the statutory severance pay stipulated in the Act and the accumulated pay that employers voluntarily set in excess of the statutory amount. Given that a full-fledged social security system is not yet installed in Korea, the retirement benefits system has played an important role in terms of workfare by partially supporting the livelihoods of workers who retire from old age or those who are temporarily between jobs. As the country’s economic growth over the past 20 years has enlarged the size of corporate sector, especially in terms of employment, their retirement benefit appropriation funds have been sharply growing in size, thereby threatening to weaken the overall competitiveness of the corporate sector, which is the core of further growth.
The current retirement benefits system only allows lump-sum payment, which means relatively low amount of payments and insufficient livelihood support for retirees from old age, given high turnover rates in Korea’s labor markets and the significant disparity of income between blue and white collar workers in the country. To tackle these problems, the current system needs to be developed into corporate savings programs, and then eventually to be developed into corporate pension plans, while taking into account factors, such as the pattern of aging population and improvements of corporate management. Also, plans should be devised to bring the excessive taxation on retirement benefits under control and to help the unemployed, except for those who are temporarily out of work of their own will. Modifications should be made for the system to ensure the appropriate level of retirement payments, as well as for the Income Tax Law. Firms should be allowed to trust their retirement benefit appropriation funds to certified institutions. Preferential tax treatment should be given to firms that decide to retain the funds, thereby helping create stable working conditions and ensure the payment of retirement benefits. It should also be made sure that retirement payments be made without regard to the firms’ financial status. Institutional supplementation is needed for the corporate sector to enhance the retirement benefit system in terms of rate of payment, payment standards, and methods of calculating the amount of benefits.
퇴직금제도의 문제점과 개선방향
|Series Title; No||연구보고 / 84-02|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Social Development < Employment|
|Holding||KDI; KDI School|