Who now faces five years for unpaid retirement benefits? The March 2026 amendment to the Employee Retirement Benefit Security Act

What changed

Article 43 of the Employee Retirement Benefit Security Act used to punish only a breach of Article 37(6), with imprisonment for up to 5 years or a fine of up to 50 million won. The two arrears offences sat in Article 44 at up to 3 years or 30 million won: failure to pay severance in breach of Article 9(1), and failure at the worker's retirement to pay benefits or to pay contributions or late interest in breach of Article 17(2) and (3), Article 20(5), Article 23-7(2) or Article 25(3). Article 44 also barred prosecution against the victim's express will for those two offences, except where an employer publicly named for wage arrears under Article 43-2 of the Labour Standards Act committed one of them during the naming period. Act No. 21475, promulgated on 17 March 2026, folds those two offences into Article 43 as items 1 and 2 and keeps the Article 37(6) breach as item 3, so all three now carry up to 5 years' imprisonment or a fine of up to 50 million won; the proviso follows them into Article 43 in the same words.

Article 44 keeps the penalty of up to 3 years' imprisonment or a fine of up to 30 million won, but its proviso is deleted and its first two items are deleted. Its remaining two items are renumbered as items 1 and 2: a retirement pension business operator that fails to take protective measures for members in breach of Article 27(4), and one that breaches Article 33(3) and (4). The official reason gives the aim of the penalty change as sharpening employers' sense of responsibility and preventing retirement benefit arrears in advance.

Article 2(14) defines the SME retirement pension fund scheme by reference to businesses regularly employing '30 employees or fewer'; the amendment replaces that figure with 'fewer than 100 employees'. The official reason also states that small self-employed persons and others whose old-age income preparation is weak are permitted to open a subscriber contribution account under the fund scheme, and one further sentence covers the rest of the amendment: Article 23-8 is recast so that eligibility for a subscriber contribution account follows the categories in Article 24(2) with 'individual retirement pension scheme' read as the fund scheme, and contributions are governed by Article 24(3) applied mutatis mutandis, Article 9(2) is updated to point to Article 23-8(1), and state support under Article 23-14(1) is opened to workers and to service providers and others falling under Article 91-15 of the Industrial Accident Compensation Insurance Act.

What to read in the text

Addendum Article 1 brings the Act into force on 1 July 2026, but provides that the amended Articles 43 and 44 come into force on the day six months have elapsed after promulgation; the National Law Information Center records 18 September 2026 as that date. The addendum says nothing about cases already pending or about acts done before entry into force.

Addendum Article 2 is a special rule on the businesses covered by the fund scheme: despite the amendment to Article 2(14), the '100 persons' there means 50 persons from 1 July 2026 to 31 December 2026, and 100 persons from 1 January 2027. A file therefore needs the date of the non-payment or other conduct, the provision said to be breached, the number of workers the business regularly employs on the relevant date, and, where the prosecution proviso matters, whether the employer was publicly named under Article 43-2 of the Labour Standards Act and whether the conduct fell within the naming period. Article 23-8 and Article 9(2) turn on Article 24, and Article 23-14(1) on Article 91-15 of the Industrial Accident Compensation Insurance Act; this note has not read those provisions and gives no content for them.

Questions for the legislature

Article 43's proviso refers to 'the victim's express will' and excepts an employer 'publicly named' for wage arrears under the Labour Standards Act, which this note has not read. Neither the amendment text, the addendum nor the official reason states at what point in the proceedings that will must be shown, or how it is to be recorded. When must the victim's express will be shown for the bar to prosecution to apply?

Addendum Article 2 sets the figure at '50 persons' for 1 July 2026 to 31 December 2026 and '100 persons' from 1 January 2027, while Article 2(14) speaks of a business 'regularly employing' fewer than the set number. Neither the text, the addendum nor the official reason says which day's headcount decides for a business whose workforce changes during a period. On which date is the workforce counted?

When to revisit

We revisit this note when Article 24 of the Act and Article 91-15 of the Industrial Accident Compensation Insurance Act are read against Article 23-8 and Article 23-14(1), if a court decision explains the victim's express will or the naming-period proviso in Article 43, or if the headcount figures in Addendum Article 2 are changed.