For firms too small to run a retirement pension of their own, the Employee Retirement Benefit Security Act provides the SME Retirement Pension Fund: contributions from many small firms pooled in one fund run by the Korea Workers’ Compensation and Welfare Service (Act Art. 2(14), Art. 23-2). Firms with fewer than 100 regular workers can join, and the state may subsidise part of the contributions (Art. 23-14). The details are in a labour ministry Notice. Opening it, the subsidy goes to firms with 30 or fewer regular workers, for members whose monthly average pay is under 2.81 million won, at 10/100 of the regular contribution, capped at 281,000 won a year per member, for 3 years from first joining. The calculator applies those tests.
1. The fund is for firms under 100 workers; the subsidy for 30 or fewer (Act Art. 2(14), Notice Art. 2(1)).
2. For members paid under 2.81 million won a month, 10% of on-time regular contributions — up to 281,000 won each a year, 30 members per firm (Notice Arts. 2(3), 3).
3. For 3 years from first joining; the Notice applies until 31 December 2026 (Notice Arts. 4, 7).
Calculator
Updates as you type. Leaving the contribution blank uses monthly pay × 12 ÷ 12 (our simplification of annual pay ÷ 12). The Notice states both the employer and member subsidies as 10/100 of the regular contribution without splitting them; the calculator shows that one figure (our reading). The period end is the day before the same date three years on (our count).
The framework in the Act
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Act Art. 2(14) | The SME Retirement Pension Fund is a scheme in which contributions paid by employers and workers of two or more SMEs (limited to businesses with fewer than 100 regular workers) form a common fund that pays benefits to workers. | Wording as amended 17 March 2026 |
| Act Art. 23-2(1) | The scheme is run by the Service. | The Workers’ Compensation and Welfare Service |
| Act Art. 23-6(1) | An employer sets it up by contract with the Service, with the consent or views of the workers’ representative on the standard contract terms. | Joining is by contract |
| Act Art. 23-7(1)–(2) | The employer must pay at least once a year at least 1/12 of the member’s annual pay in cash, with late interest if late; on leaving, arrears and interest within 14 days. | Same structure as DC (Art. 20) |
| Act Art. 23-12(2) | Benefits from the employer-contribution account are paid by transfer to the IRP or other account the member names. | Paid out through an IRP |
| Act Art. 23-13 | Early withdrawal follows Art. 22 (DC) for the employer account and Art. 24(5) for the member account. | Same grounds as DC and IRP |
| Act Art. 23-14(1) | The state may support, within the budget, part of employer and member contributions and running costs where the Minister’s conditions are met, to ease costs and encourage workers and platform-type workers to join. | Platform-type workers added on 17 March 2026 |
Decree Article 16-15 names the supported items (employer contributions, member contributions, running costs) and leaves the level to a ministerial Notice. Applicants file a form (Art. 16-16); in cases such as improper receipt the whole amount is recovered (Art. 16-17).
The figures in the Notice
| Article | Notice text | Worth noting (ours) |
|---|---|---|
| Art. 2(1) | Firms with 30 or fewer regular workers on the date of application; public institutions excluded | From 31 to 99 a firm can join but gets no subsidy |
| Art. 2(3) | Only where the member’s employment-insurance monthly average pay is under 2.81 million won | Based on the previous year’s pay |
| Art. 3(1) | Support is 10/100 of the regular contribution the employer paid that year; amounts under 10 won are dropped | — |
| Art. 3(2) | Regular contributions are those based on annual pay and paid by the due date | Late payments don’t count |
| Art. 3(3) | Yearly cap 281,000 won per member, up to 30 members per firm | — |
| Art. 4 | Support lasts 3 years from the firm’s first joining | — |
| Art. 5 | Checked each quarter; employer share to the employer’s account, member share to the member-contribution account | — |
| Art. 7 | Targets, conditions and levels apply until 31 December 2026; support may stop if the budget runs out | Look for a new Notice for 2027 |
Three sums — our example
| Case (our example) | Yearly subsidy | Worth noting (ours) |
|---|---|---|
| 10 workers; monthly pay 2.5 million won; regular contribution 2.5 million (30 million a year ÷ 12) | 250,000 won | 2.5 million × 10/100 |
| Monthly pay 2.8 million; contribution 2.8 million | 280,000 won | Under 2.81 million, so eligible |
| Monthly pay 2.5 million, but the employer pays 3 million | 281,000 won | 300,000, capped at 281,000 |
With pay under 2.81 million and a contribution of exactly 1/12, 10% never reaches 281,000 won; the cap bites only when the employer pays more (our sum). With the 30-member limit, the most one firm can receive in a year is 8,430,000 won (281,000 × 30, our sum). Monthly pay of exactly 2.81 million shows “no subsidy”, because the Notice says “under”.
Employer share and member share — the wording
Notice Article 3(1) puts both in one sentence: the support level for employer and member contributions is “10/100 of the regular contribution”, while Article 5 sends the employer share to the employer and the member share to the member account. Whether that is 10% each or 10% split between them is not settled by the wording, so the calculator shows the single figure (our reading). Ask the Service how it is divided.
The DC contribution (1/12) and late interest are in the DC contribution calculator; early withdrawal grounds are in retirement pension early withdrawal.
Checklist
- ☐ 30 or fewer regular workers on the application date (under 100 can still join)
- ☐ Each member’s monthly average pay under 2.81 million won
- ☐ Regular contributions paid on time
- ☐ Within 3 years of first joining
- ☐ From 2027, a new Notice in force
Questions that remain
Does the worker apply separately?
Decree Article 16-16 and Notice Article 5 have “the employer and the member” file the form. Article 6 leaves forms and procedure to the Service, so check its guidance.
When must a subsidy be paid back?
Act Art. 23-14(3) lists three grounds for recovery, and Decree Art. 16-17(1) sets the amount for each.
| Act para. 3 | Ground | Recovered (Decree para. 1) |
|---|---|---|
| Item 1 | Received by deceit or other improper means | The whole amount received |
| Item 2 | Paid in error | The whole amount paid in error |
| Item 3 | The employer closes its fund plan without a proper reason | The whole amount received |
Decree Art. 16-17(3) gives four “proper reasons” for item 3: insolvency (a finding under Wage Claim Guarantee Act Decree Art. 5(1)), a bankruptcy declaration or a decision to open rehabilitation, a switch to another retirement benefit plan, and other reasons such as closing the business set by Ministry ordinance. A plan closed for one of these is outside item 3. Under the proviso to para. 3 and Decree para. 4, a recovery of under 3,000 won may be waived; when it does recover, the Service gives notice and then sets out the amount, deadline and method in writing (Decree para. 2). The Service may collect it like national tax arrears (Act para. 4).
How is it paid on leaving?
Under Act Art. 23-12(2), by transfer to the IRP or account the member names; if none is named, to an IRP in the member’s name.
Sources
- Korean law database (law.go.kr) — Employee Retirement Benefit Security Act Art. 2(14), Arts. 23-2 to 23-14 — source (current text, effective 18 September 2026, Act No. 21475; checked 26 October 2026). Definition (under 100 workers), operation by the Service, set-up, contributions (1/12, 14 days), IRP transfer, withdrawal, state support.
- Korean law database — Enforcement Decree Arts. 16-15 to 16-17 — source (effective 24 March 2026, Decree No. 36220; checked 26 October 2026). Delegation to the Notice, applications, recovery (amounts by ground, the four proper reasons, 3,000 won).
- Korean law database — Notice on Support for the SME Retirement Pension Fund — source (effective 1 January 2026, MOEL Notice No. 2025-130; checked 26 October 2026). 30 or fewer, under 2.81 million, 10/100 with under-10-won dropped, 281,000 per member and 30 members, 3 years, until 31 December 2026.
- Not read. The Ministry ordinance that Decree Art. 16-17(3) item 4 points to (closing the business and similar reasons); the Service’s detailed procedures.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- The Workers’ Compensation and Welfare Service — the contract, the subsidy form, how shares are split.
- The law database’s administrative rules — the Notice for 2027.
Written on 26 October 2026. The content is from the source; the glosses are ours.
