Corporate retirement pension funds managed by South Korea's financial institutions topped 125 trillion won ($106 billion) last year, more than a decade after the country introduced the scheme, government data showed Monday.
The scheme introduced in 2005 aims to help fund retirees' severance payments. Companies and employees make contributions to the pension funds, and employees can receive the pension after their retirement.
The South Korean government has been encouraging companies to adopt the retirement annuity program as part of efforts to help reduce the financial burden of severance payments as well as allow employees to receive stable pension payments and higher retirement payments.
All retirement pension programs amounted to 125.7 trillion won as of end-2015, including 10.8 trillion won in individual retirement pensions, according to the data first compiled by Statistics Korea.
Out of 1.11 million businesses, 302,000 companies, or 27.2 percent, adopted the scheme for their employees last year, with the comparable figure for small firms being 12 percent.
The data showed that 78.3 percent of large corporations with 300 workers or more adopted retirement pension programs last year, followed by 75.6 percent for businesses with 100-299 employees.
About 5.35 million workers, or 47.2 percent of all 11.3 million employees, were covered by corporate pension programs last year.
They had accumulated a contribution of an average 23 million won. (Yonhap)
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