|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Laws of the Republic of Korea |
ENFORCEMENT DECREE OF THE EMPLOYEE RETIREMENT BENEFIT SECURITY ACT
Presidential Decree No. 19010, Aug. 19, 2005
Amended by Presidential Decree No. 19513, Jun. 12, 2006 Presidential Decree No. 20681, Feb. 29, 2008
Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Employee Retirement Benefit Security Act and those necessary for the enforcement thereof.
Article 2 (Composition of Retirement Pension Deliberation Committee)
(1) The Retirement Pension Deliberation Committee (hereinafter
referred to as the "Committee") under Article 6 of the Employee
Retirement Benefit Security Act (hereinafter referred to as the
"Act") shall consist of a chairman and members commissioned
or appointed by the Minister of Labor in accordance to the
classification
described in the following subparagraphs:
1. Two members representing workers and two members
representing employers;
2. Three retirement pension experts representing the public
interest; and
3. Two members each recommended by the Minister of
Strategic Planning and Finance and the Financial Services
Commission from among
public officials of Grade in
their respective organizations or general public officials
belonging to the Senior Civil Service,
and one member
who is a public official of Grade in charge of
retirement benefits in the Ministry of Labor or a general
public official belonging to the Senior Civil Service.
(2) The members
referred to in subparagraphs 1 and 2 of
paragraph (1) shall serve a three-year term and may be
renewed.
(3) The Committee shall have a secretary, and the secretary
shall be designated by the Minister of Labor from among public
officials
of Grade or in charge of retirement benefits at
the Ministry of Labor or general public officials belonging to
the Senior Civil
Service.
Article 3 (Duties of Chairman)
(1) The Chairman of the Committee shall represent the
Committee and supervise its affairs.
(2) If the Chairman cannot perform his/her responsibilities
for some inevitable reason, a Committee member designated in
advance
by the Chairman shall act on his/her behalf.
Article 4 (Meeting of Committee)
(1) The Chairman of the Committee shall convene and
preside over its meetings at the request of at least one third of
its members
or if deemed necessary by the Chairman
himself/herself.
(2) If the chairman intends to convene a meeting, he/she
shall notify each member of its time, date, place and agenda at
least
seven days prior to the meeting: Provided that this shall
not apply in the event of an emergency.
(3) A meeting of the Committee shall be held with the
attendance of a majority of its members and decisions shall be
made with
the approval by a majority of members present.
Article 5 (Working Committee)
A Working Committee may be established within the
Committee to ensure the efficient operation of the Committee
and handle matters
delegated by the Committee.
Article 6 (Allowances)
Members who attend a Committee or Working Committee
meeting may be given allowances within the budget limit:
Provided that this
shall not apply in case a Committee or
Working Committee member who is a public official attends a
Committee or Working Committee
meeting in directly relation
to his/her responsible duties.
Article 7 (Operational Rules)
Except as provided in this Decree, necessary matters
regarding the operation of the Committee or the composition,
operation, etc.,
of the Working Committee shall be determined
by the Chairman after resolution at the Committee.
Article 8 (Reasons for Offering
Right to Receive Benefits as
Collateral)
"The cases in which the reasons and conditions prescribed
by the Presidential Decree, such as housing purchases, etc., are
- 3
-
met" in the proviso of Article 7 of the Act refer to those falling
under any of the following subparagraphs:
1. In case a pension holder who does not own a house
purchases a house;
2. In case a pension holder or his/her dependent family
member has been under medical care for six months or
more; or
3. In case other reasons and conditions prescribed by the
Ordinance of the Ministry of Labor, such as natural
disasters, armed conflicts,
etc., are met.
Article 9 (Level of Reserves Under Defined Benefit Retirement
Pension Plan)
The "level prescribed by the Presidential Decree" in items A
and B of subparagraph 5 of Article 12 of the Act means 60/100
of the
amount calculated pursuant to each item: Provided that
if the period of offering services before the establishment of the
retirement
pension plan concerned is included in the period of
contribution pursuant to the provisions of the latter part of
subparagraph
3 of Article 12 of the Act, then the level of
reserves for the period of service concerned shall be determined
and announced by
the Minister of Labor after taking into
consideration such a period but shall not exceed 60/100 of the
amount calculated pursuant
to each item.
Article 10 (Provisions of Defined Benefit Retirement Pension Rules)
The "matters prescribed by the Presidential Decree" in
subparagraph
11 of Article 12 of the Act refer to those
described in the following subparagraphs:
1. Matters concerning the payment of contributions; and
2. Matters concerning the methods used to educate pension
holders.
Article 11 (Reasons for Early Withdrawal from Defined Contribution
Retirement Pension Plan)
The "reasons prescribed by the Presidential Decree, such as
housing purchase, etc.," in the latter part of subparagraph 5 of
Article
13 of the Act refer to those described in any of the
subparagraphs of Article 8.
Article 12 (Provisions of Defined Contribution Retirement Pension
Rules)
The "matters prescribed by the Presidential Decree" in
subparagraph 7 of Article 13 of the Act mean those described
- 4 -
in the following subparagraphs:
1. Matters concerning the payment of expenses required to
perform operation management services (hereinafter
referred to as "operation
management services") pursuant
to Article 15 of the Act and asset management services
(hereinafter referred to as "asset management
services")
pursuant to Article 16 of the Act; and
2. Matters concerning the methods used to educate pension
holders.
Article 13 (Registration Requirements, etc., for Retirement Pension
Trustee)
(1) The "requirements prescribed by the Presidential Decree,
such as financial soundness, personnel and physical
requirements,
etc.," in parts other than each subparagraph of
Article 14 of the Act refer to all of the requirements described
in the following
subparagraphs:
1. The capital adequacy ratio under Article 10 (1) of the Act
on the Structural Improvement of the Financial Industry
shall be not
lower than the standard determined and
announced by the Financial Services Commission pursuant
to Article 10 (2) of the same Act.
In this case, a person
who does not fall under any of the subparagraphs of
Article 2 of the Act on the Structural Improvement of
the
Financial Industry shall be subject to the same standard
applied to those falling under one of the subparagraphs
of Article
14 of the Act and most similar to the person
concerned in terms of business, financial structure, etc.
2. There shall be necessary personnel, such as those with
expertise in operation management services or asset
management services
and computer specialists required to
perform tasks; and
3. Computer facilities and offices necessary to perform
operation management services or asset management
services shall be in place.
In this case, the computer
facilities shall have back-up facilities in order to ensure
the continuity of business services in the
event of an
accident such as power blackouts or fires.
(2) The Financial Services Commission shall determine and
announce detailed standards regarding the requirements under
subparagraphs
2 and 3 of paragraph (1). In this case, it shall
consult with the Minister of Labor in advance.
(3) The "persons prescribed by the Presidential Decree" in
subparagraph 5 of Article 14 of the Act refer to those licensed
to do
trust business under the Trust Business Act.
Article 14 (Partial Entrustment of Operation Management Services)
(1) The "part of
the services prescribed by the Presidential
Decree" in Article 15 (2) of the Act refers to the services
described in subparagraphs
2 through 4 of paragraph (1) of the
same Article.
(2) The "requirements prescribed by the Presidential Decree,
such as personnel and physical requirements," in Article 15 (2)
of
the Act refer to the requirements specified in the following
subparagraphs:
1. A person intending to handle the services specified in
Article 15 (1) 2 of the Act shall have in place
professional personnel capable of performing such
services; and
2. A person intending to handle the services specified in
subparagraphs 3 and 4 of Article 15 (1) of the Act shall
have in place
professional personnel capable of
performing such services, and computer facilities and
offices required therefor. In this case, the computer
facilities shall have
back-up facilities in order to ensure
the continuity of business services in the event of an
accident such as power blackouts or
fires.
(3) The Minister of Labor shall determine and announce
detailed standards regarding the requirements under each
subparagraph of
paragraph (2).
Article 15 (Types of Contracts to Perform Asset Management Services)
The "insurance contract or trust contract prescribed by the
Presidential Decree" in Article 16 (2) of the Act refers to
insurance contracts by which a special account under Article
108 of
the Insurance Business Act is operated or specified
money trust contracts under Article 3 (2) 1 of the Enforcement
Decree of the
Trust Business Act and shall meet all of the
requirements specified in the following subparagraphs:
1. Benefits shall be paid upon the retirement of a pension
holder;
2. Pension holders shall be able to directly demand benefit
payments from the retirement pension trustee: Provided
that pension
holders whose consecutive service period is
less than a year shall not be able to demand the
- 6 -
payment, and the reserve fund shall belong to the
employer; and
3. Upon termination of a contract, the reserve fund shall be
paid to the pension holder: Provided that for pension
holders whose
consecutive service period is less than a
year, the reserve fund shall belong to the employer.
Article 16 (Operation Method for
Guaranteeing Repayment of
Principals and Interests Under Defined Contribution
Retirement Pension Plans and Individual Retirement
Accounts)
(1) The "operation method prescribed by the Presidential
Decree, which guarantees the repayment of principals and
interests" in
Article 17 (2) 4 of the Act refers to the operation
methods specified in the following subparagraphs:
1. An operation method by which a financial institution
meeting certain criteria determined and announced by the
Financial Services
Commission, regarding credit rating,
etc., guarantees the payment of principals and interests;
2. Treasury bonds, local government bonds, monetary
stabilization bonds of the Bank of Korea under Article 69
(1) of the Bank of
Korea Act, or other bonds for which
the government guarantees the payment of principals and
interests; or
3. An operation method equivalent to those prescribed in
subparagraphs 1 and 2 and determined and announced
by the Financial Services
Commission.
(2) If the Financial Services Commission intends to
determine the matters referred to in subparagraphs 1 and 3 of
paragraph (1),
it shall consult with the Minister of Labor in
advance.
(1) The "operation methods and standards prescribed by the
Presidential Decree, such as diversified investment" in Article 17
(2)
5 of the Act refer to those specified in the following
subparagraphs:
1. Operation methods : Operation methods falling under any
of the following items:
A. Savings and deposits handled by financial institutions
under the Banking Act;
- 7 -
B. Insurance contracts handled by insurance companies
under the Insurance Business Act;
C. Specified money trusts under the provisions of Article 3
(2) 1 of the Enforcement Decree of the Trust Business Act;
D. Securities
prescribed in the Securities and Exchange
Act and determined and announced by the Financial
Services Commission: Provided that
the securities
(excluding indirect securities under the Act on
Business of Operating Indirect Investment and Assets)
shall not be those issued by an employer or an
interested person determined and announced by the
Financial Services Commission; and
E. Other operation methods necessary for the stable
operation of reserve funds and determined and
announced by the Financial Services Commission.
2. Standards : Standards determined and announced by the
Financial Services Commission with regard to the matters
referred to in
the following items. In this case, the
Financial Services Commission may set different standards
according to type of retirement
pension plan.
A. Investment limits for each of the asset classes with
high investment risks (hereinafter referred to as "risky
assets") among
the operation methods prescribed in
each item of subparagraph 1. In this case, as for
defined contribution retirement pension plans
and
individual retirement accounts, investments shall not
be made in risky assets as prescribed by the
Ordinance of the Ministry of Labor unless a method
of indirect investment (hereinafter referred to as
"indirect investment") prescribed
in subparagraph 1 of
Article 2 of the Act on Business of Operating Indirect
Investment and Assets is used; and
B. Where defined contribution retirement pension plans
and individual retirement accounts are operated
through indirect investments in risky assets, the
aggregate investment limit for the risky assets. In this
case, the aggregate
investment limit shall not exceed
the one prescribed by the Ordinance of the Ministry of
Labor.
(2) If the Financial Services Commission intends to
determine the matters referred to in items D and E of
subparagraph 1 and each
item of subparagraph 2 of paragraph
1, it shall consult with the Minister of Labor in advance.
- 8 -
1. In the case of defined benefit retirement pension plans,
the matters refer to those described in the following items:
A. Standard
benefit amount and payment status by type
of benefit;
B. Amount of contribution paid by the employer and the
payment date and payment status thereof;
C. Size of reserve funds compared to estimated benefit
amounts; and
D. Handling procedures in the event of the job transfer
or separation from work of pension holders, methods
of operating and managing
reserve funds in the case
of retirement.
2. In the case of defined contribution retirement pension
plans, the matters refer to those described in the
following items:
A. Level of contribution paid by employers and the
payment date and payment status thereof;
B. Status of the operation of reserve funds including
profits from fund operation for each pension holder
and ratio of each operation
method;
C. Matters concerning the risks and profits of the
operation methods proposed by the retirement pension
trustee; and
D. Matters concerning the importance of setting up a
plan for old age in consideration of a pension holder's
age, consecutive service
period, etc.
Article 19 (Acts Prohibited for Employers)
The "acts prescribed by the Presidential Decree" in Article 19
(2) 2 of the Act mean an act of deliberately omitting or forging
any data required to perform operation management services or
asset management services and giving such data to a retirement
pension
trustee.
Article 20 (Acts Prohibited for Retirement Pension Trustees)
The "acts prescribed by the Presidential Decree" in Article
20 (2)
4 of the Act refer to acts falling under any of the
following subparagraphs:
- 9 -
1. An act of delivering a judgment, made conclusively or
without reasonable grounds on a rise or fall in the value
of a particular
operation method, to an employer or a
pension holder; and
2. An act of using information obtained in the process of
performing his/her services, such as operation instructions
to an employer
or a pension holder, for his/her own
benefit or for the benefit of a third party.
Article 21 (Education for Individual Retirement Account Holders)
The "matters prescribed by the Presidential Decree, such as
the
operating status of the retirement pension plan of the
business concerned" in Article 20 (4) of the Act refer to those
specified
in each item of subparagraph 2 of Article 18: Provided
that item A of the same subparagraph shall be limited to the
education for
individual retirement account holders prescribed in
Article 26 of the Act.
Article 22 (Supervision by Financial Services Commission over
Retirement Pension Trustees)
(1) The "services prescribed by the Presidential Decree" in
Article 23 (4) of the Act refer to operation management services
and
asset management services.
(2) The "measures prescribed by the Presidential Decree" in
Article 23 (4) of the Act refer to the measures described in the
following
subparagraphs:
1. Calling for notices or warnings against a retirement
pension trustee or its senior executive, and for notices,
warnings, reprimands,
pay cuts, suspension or dismissal
against any of its employee;
2. Ordering correction of the violation concerned;
3. Recommending dismissal of, or calling for suspension
from job of, a senior executive; and
4. Partially suspending business for a period of up to six
months.
(3) The Financial Services Commission may determine and
announce detailed standards necessary to supervise the services
specified
in paragraph (1). In this case, it shall consult with the
Minister of Labor in advance.