When you leave a job in Korea, severance pay goes by default not to your bank account but to an IRP (individual retirement pension) account. Article 9(2) of the Employee Retirement Benefit Security Act requires payment by transfer to the IRP account the worker names; if none is named, it goes to an IRP in the worker’s name (para. 3). It’s due within 14 days of leaving. Decree Article 3-2 sets five exceptions — leaving after 55, amounts at or below a notified figure, death, foreign workers leaving Korea, and deductions under other laws.
1. Severance is paid by transfer to an IRP or similar, within 14 days (extendable by agreement).
2. No account named? It goes to an IRP in your name.
3. Five exceptions: leaving after 55, a small amount, death, foreign workers departing, deductions under other laws.
How it must be paid — Art. 9
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| (1) Deadline | Within 14 days of the reason arising; extendable by agreement in special circumstances | — |
| (2) Method | Transfer to the worker’s named IRP or an Article 23-8 account (SME retirement pension fund) | Cash isn’t the default |
| (2) Proviso | Exceptions such as leaving after 55, set by Decree | Below |
| (3) Not named | Transfer to an IRP in the worker’s name | — |
When an IRP isn’t required — Decree Art. 3-2
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Item 1 | Leaving and being paid after age 55 | — |
| Item 2 | The benefit is at or below an amount notified by the Labour Minister | Notice not read |
| Item 3 | The worker dies | — |
| Item 4 | A foreign worker on a work visa leaves Korea after the job ends | — |
| Item 5 | Other laws require deductions | The rest still goes to an IRP (para. 2) |
The order of things — our summary
| When | What to do | Worth noting (ours) |
|---|---|---|
| Before leaving | Open an IRP and give the employer the account | The account “the worker names” in Art. 9(2) |
| Within 14 days | The employer transfers severance there | Or the agreed later date |
| Nothing named | It goes to an IRP in your name | Art. 9(3) |
| Leaving after 55 | A non-IRP account is allowed | Decree Art. 3-2(1)1 |
The Act doesn’t say “don’t pay cash”; it says pay by transfer to an IRP or similar. So naming an account in advance is the way to be paid promptly if no exception applies (our reading). The table is the articles laid out in time order.
Drawing the IRP as a pension is limited — see the withdrawal limit calculator; DB versus DC and retirement income tax in DB and DC pensions; amounts in the severance calculator.
Checklist
- ☐ Opened an IRP and told the employer before leaving
- ☐ Leaving after 55: a regular account is allowed
- ☐ Paid within 14 days?
- ☐ Extensions need agreement
- ☐ Foreign workers departing, death: exceptions
Questions that remain
Can I take the money straight out of the IRP?
These articles cover only how it’s paid. Withdrawing from the IRP falls under the pension account rules (Income Tax Decree Art. 40-2), set out in the withdrawal limit calculator.
What about small amounts?
Item 2 exempts amounts at or below a figure the Labour Minister notifies. We didn’t open that notice.
Sources
- Korean law database (law.go.kr) — Employee Retirement Benefit Security Act Art. 9 — source (current text, effective 18 September 2026, Act No. 21475; checked 19 October 2026). 14-day deadline and extension, IRP transfer rule, default IRP, five exceptions and transfer of the remainder.
- Korean law database — Enforcement Decree Art. 3-2 (effective 24 March 2026, No. 36220).
- Not read. The Labour Ministry notice amount; retirement income tax deferral rules.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your employer’s HR, the Ministry of Employment and Labor — late payment or account problems.
Written on 19 October 2026. The content is from the source; the glosses are ours.
