Government to Promote Private Pension Plans

29TH MINISTERIAL MEETING ON THE ECONOMY

GOVERNMENT TO PROMOTE PRIVATE PENSION PLANS

Deputy Prime Minister Choi Kyung Hwan hosted the 29th Ministerial Meeting on the Economy on August 27 and discussed the following topics:

- Measures to promote private pension plans
- Follow-up measures for the 'Measures to Stimulate Investment: Fostering Promising Service Industries'

The Deputy Prime Minister began his speech noting that the economy is beginning to see hints of improvements in consumer confidence as both the stock market and housing market have picked up somewhat owing to the policies that the Park Administration's new economic team has been implementing since being appointed about 40 days ago.

The following is a summary of the keynote speech delivered by the Deputy Prime Minister at the meeting:

Measures to Promote Private Pension Plans

Korea has a number of systems in place to guarantee that the elderly have a source of income: the national pension plan was introduced in 1988, personal pension plans were introduced in 1994, and retirement pension plans were introduced in 2004. Government pension plans, such as the basic pension and the national pension plans, are in a good place, and now it is time to start strengthening private pension plans, such as the retirement pension and personal pension plans.

Beginning in 2016, the government will make it mandatory for businesses with 300 or more employees to provide retirement pensions to their employees, and this requirement will gradually be extended to all businesses by 2022. This will allow employees to enjoy the superior benefits of retirement pension plans, compared to the severance pay they are receiving now, and the government is looking into ways to ensure that this mandate does not place an undue burden upon businesses. The government will ease excessive asset management regulations concerning retirement pensions in order to balance stability and profits, and will introduce an SME retirement pension fund system for businesses with 30 or less employees and a fund-type retirement pension system for large corporations in order to prioritize employee benefits.

The government will carefully monitor the implementation of these systems and will continue to search for ways to make additional improvements.

Follow-up Measures for the 'Measures to Stimulate Investment: Fostering Promising Service Industries'

Fostering the service industry boosts Korea's economic potential and creates jobs in the number one sector that Korean young adults want to work in.

Of the 135 initiatives the government outlined in the 'Measures to Stimulate Investment: Fostering Promising Service Industries,' more than 60 percent will be completed by the end of the year. The 5+2 Task Force is monitoring the implementation of these initiatives on a biweekly basis in order to complete these projects as soon as possible. The government will submit required legislation to the National Assembly by the end of the year, as well.

The government will play an active role in managing projects that require cooperation between various ministries and institutions, such as improving tourist facilities along the Han River, promoting tourism in Korea's mountainous regions, installing environmentally-friendly cable cars and attracting international theme parks in order to ensure that these projects are implemented according to plan.

With regards to the Jeju Island Myth and History Resort, the central government is working together with the government of Jeju Island to speed up the process of receiving approval to install supervisory systems and facilities in the casino that will be attached to the resort.

Please refer to the attached PDF.

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