In a Korean DC (defined contribution) retirement pension, the employer pays a set amount into the worker’s account every year and the worker decides how it is invested. Article 20 of the Employee Retirement Benefit Security Act sets that amount at at least one-twelfth (1/12) of the member’s annual pay total, paid regularly at least once a year. If the employer misses the due date, late interest runs from the next day, and Article 11 of the Enforcement Decree splits the rate into 10% a year and 20% a year. Enter the annual pay and the dates to see the minimum contribution and the late interest.
1. The employer pays at least 1/12 of annual pay, in cash, at least once a year (Art. 20(1), (3)).
2. Missed due date: interest from the next day — 10% a year up to 14 days after leaving, 20% a year after that (Decree Art. 11).
3. Anything unpaid at leaving must go in within 14 days, with the interest (Art. 20(5)).
Calculator
Updates as you type. Days run from the day after the due date to the day paid, both included; “up to 14 days” ends on the 14th day after the leaving date (our count). Interest = unpaid × rate × days ÷ 365, won fractions dropped (our method). Periods excluded under Art. 20(4) are not handled.
The provisions
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Act Art. 20(1) | An employer with a DC plan must pay a contribution of at least 1/12 of the member’s annual pay total, in cash, into the member’s account. | “At least” — the plan rules may set more |
| Act Art. 20(2) | The member may pay additional contributions of their own. | Money the worker adds |
| Act Art. 20(3) | The employer must pay regularly at least once a year. If it misses the set date (or the extended date the plan rules allow), it must pay late interest from the next day until the day it pays, at a rate set by Decree within 40% a year. | The date itself is left to the plan rules |
| Act Art. 20(4) | Paragraph (3) does not apply while a natural disaster or another reason set by Decree continues. | Decree Art. 12 points to Labor Standards Act Decree Art. 18: rehabilitation, bankruptcy or a finding of inability to pay; legal limits on funds; a dispute fit for a court or labor commission; similar reasons (see Q&A below) |
| Act Art. 20(5) | If a contribution is unpaid when the member leaves or another set event occurs, the employer must pay it with the interest within 14 days of that event; the parties may agree to extend. | The same 14 days as severance pay (Art. 9) |
| Decree Art. 11, item 1 | From the day after the due date until 14 days after the event such as leaving (or the agreed later date): 10/100 a year | Unpaid while still employed falls here |
| Decree Art. 11, item 2 | From the day after that period until the day paid: 20/100 a year | Doubles once 14 days after leaving have passed |
Three points, then. The floor is 1/12 of annual pay; the date is set by the employer’s DC plan rules; and interest builds from the day after. The rate is 10% a year while the worker is still there and 20% a year from 14 days after leaving. The Act caps the rate at 40/100; the Decree chose 10% and 20% within that.
Three sums — our example
| Case (our example) | Result | Worth noting (ours) |
|---|---|---|
| Annual pay of 36 million won | Minimum contribution 3,000,000 won | 36 million ÷ 12 |
| That 3,000,000 won missed on 31 Dec 2026, paid on 31 Mar 2027 while still employed | 90 days × 10% = 73,972 won | 1 January to 31 March |
| Same arrears, leaving 31 Mar 2027, paid 31 May 2027 | 104 days at 10% 85,479 won + 47 days at 20% 77,260 won = 162,739 won | Day 14 is 14 April (our count) |
We counted days from the day after the due date (1 January 2027) to the day paid, both included. We read “14 days from the event” as ending on 14 April, the 14th day after the leaving date — our count, applying the Civil Act’s first-day rule. Interest is unpaid × rate × days ÷ 365 with won fractions dropped (our method). The pension provider’s own calculation governs.
The “once a year” date is in the plan rules
The Act only says “regularly at least once a year”; it names no day. That date is in the employer’s DC plan rules, and if the rules allow an extension the extended date counts. Put that date in the calculator. A firm that pays at year-end but pays in March instead owes roughly 90 days of interest (our gloss).
On leaving — 14 days and the IRP
If contributions are unpaid when the member leaves, the employer must pay them and the interest within 14 days (Art. 20(5)). Paragraphs (6) and (7) let the leaver ask the provider to move the invested assets into their own IRP; the provider must do so, and the benefit is then treated as paid.
The rule that severance goes into an IRP is in the IRP transfer rule; DB versus DC is in DB vs DC retirement pensions.
Checklist
- ☐ Did less than annual pay ÷ 12 arrive?
- ☐ What due date do the plan rules set, and can it be extended?
- ☐ If it came late, did the interest come with it?
- ☐ After leaving, did any arrears arrive within 14 days?
Questions that remain
Does late interest apply to my own additional contributions?
Article 20(3) sets interest on “the contribution under paragraph (1)”, the employer’s. The member’s own extra payments under paragraph (2) are not something the employer can be late with, so on our reading they are outside it.
What counts as annual pay total?
The Act just says “annual pay total”. We did not check which bonuses and allowances it covers; see the plan rules and the provider.
Does hardship reduce the interest?
Article 20(4) only removes periods while a disaster or a Decree-listed reason continues. Decree Art. 12 sends that list to Labor Standards Act Decree Art. 18, which gives four grounds.
- The grounds in Wage Claim Guarantee Act Art. 7(1) items 1 to 3: a decision to open rehabilitation, a bankruptcy declaration, or a Ministry finding that the employer cannot pay the unpaid wages
- Legal limits, under the Debtor Rehabilitation and Bankruptcy Act, the National Finance Act, the Local Autonomy Act and the like, that make it hard to secure money for wages and severance
- Where it is accepted as proper to dispute in a court or labor commission whether all or part of the late wages or severance exists
- Other grounds equivalent to 1 to 3
Plain “hard times at the company” is not on this list. The calculator above does not take these periods out; if one applies, try an earlier payment date by that many days (our gloss). The same four grounds also exclude interest in the unpaid wage interest calculator (Labor Standards Act Art. 37(3)).
Sources
- Korean law database (law.go.kr) — Employee Retirement Benefit Security Act Art. 20 — source (current text, effective 18 September 2026, Act No. 21475; checked 26 October 2026). Contribution level (at least 1/12 of annual pay, in cash), extra contributions, yearly payment, late interest (within 40%), exclusions, 14 days on leaving, IRP transfer.
- Korean law database — Enforcement Decree Arts. 11–12 — source (current text, effective 24 March 2026, Decree No. 36220; checked 26 October 2026). The 10/100 and 20/100 periods; the basis for exclusions (Art. 12, pointing to Labor Standards Act Decree Art. 18).
- Korean law database — Labor Standards Act Decree Art. 18 and Wage Claim Guarantee Act Art. 7(1) — Decree source (version in force 23 October 2025) · Wage Claim Guarantee Act source (version in force 20 August 2026); checked 26 October 2026. The four exclusion grounds and the items 1 to 3 that ground 1 points to.
- Not read. Interpretations of “annual pay total”; how far ground 4 (“equivalent reasons”) reaches.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your employer’s DC plan rules — the due date and any extension.
- Your pension provider — what was actually paid and the interest.
- The regional labour office — if arrears continue.
Written on 26 October 2026. The content is from the source; the glosses are ours.
