Key Takeaways
- • The Korea Enterprises Federation (KEF) backs the goals of the Ministry of Employment and Labor's "Plan to Strengthen the Retirement Pension System" but argues mandatory external funding of retirement benefits should be phased in with policy support for small and micro businesses.
- • KEF objects that mandatory external funding would effectively make retirement pension plans mandatory at all worksites, which the plan targets by 2030.
- • KEF warns that fund-type retirement pension gains and losses fall entirely on subscribers, unlike the state-guaranteed National Pension, and calls for institutional safeguards over return-focused expectations.
- • KEF cautions that National Pension Service entry into fund-type retirement pensions could blur public-private roles and undermine fair competition with the existing Pureun Seed system.
Summary
The Korea Enterprises Federation (KEF) responded on October 29, 2026 to the Ministry of Employment and Labor's announcement of its "Plan to Strengthen the Retirement Pension System," which centers on mandatory external funding of retirement benefits and the introduction of a fund-type retirement pension system. The plan was announced jointly with the Ministry of Economy and Finance, the Financial Services Commission and the Financial Supervisory Service, following consultations with the National Assembly's Climate, Energy, Environment and Labor Committee and government-ruling party discussions. As reported by Financial News, the plan calls for mandatory external funding of retirement benefits at all worksites by 2030 and would allow private financial institutions to participate in fund-type retirement pensions.
KEF said it supports the policy's aims, stating it hopes the plan will guarantee the right to receive retirement benefits, expand choices in managing retirement pensions, and contribute to securing retirement income. However, the federation took issue with mandatory external funding, which it said would effectively make retirement pension plans mandatory at all worksites. It argued that the financial circumstances of small and micro businesses and the operational burden of the system must be fully considered, and that implementation should be "more carefully phased, with policy support provided."
On fund-type retirement pensions, KEF noted that unlike the National Pension, whose payouts are guaranteed by the state, any gains or losses from investment performance accrue entirely to subscribers. It therefore urged that expectations of improved returns not be overstated and that sufficient institutional safeguards be established to manage investment risk and protect subscribers.
KEF also scrutinized the proposed participation of the National Pension Service in fund-type retirement pension business. It pointed out that the Korea Workers' Compensation and Welfare Service's Small and Medium Enterprise Retirement Pension Fund System ("Pureun Seed") is already operating. KEF warned that National Pension Service entry could blur the division of roles between public and private pensions and potentially undermine fair competition and the sound development of the retirement pension market, stating, "Careful consideration is needed."
KEF said it supports the policy's aims, stating it hopes the plan will guarantee the right to receive retirement benefits, expand choices in managing retirement pensions, and contribute to securing retirement income. However, the federation took issue with mandatory external funding, which it said would effectively make retirement pension plans mandatory at all worksites. It argued that the financial circumstances of small and micro businesses and the operational burden of the system must be fully considered, and that implementation should be "more carefully phased, with policy support provided."
On fund-type retirement pensions, KEF noted that unlike the National Pension, whose payouts are guaranteed by the state, any gains or losses from investment performance accrue entirely to subscribers. It therefore urged that expectations of improved returns not be overstated and that sufficient institutional safeguards be established to manage investment risk and protect subscribers.
KEF also scrutinized the proposed participation of the National Pension Service in fund-type retirement pension business. It pointed out that the Korea Workers' Compensation and Welfare Service's Small and Medium Enterprise Retirement Pension Fund System ("Pureun Seed") is already operating. KEF warned that National Pension Service entry could blur the division of roles between public and private pensions and potentially undermine fair competition and the sound development of the retirement pension market, stating, "Careful consideration is needed."
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