NATIONAL PENSION ACT - World Bank

1 NATIONAL PENSION ACT. Republic of Korea NATIONAL PENSION Service - 1 - CONTENTS. CHAPTER GENERAL PROVISIONS (Article 1 ~ 5) 5. CHAPTER NATIONAL PENSION INSURED PERSONS (Article 6 ~ 23) 8. CHAPTER NATIONAL PENSION SERVICE (Article 24 ~ 48) 17. CHAPTER BENEFITS (Article 46 ~ 86) 25. Section 1 General Rules 25. Section 2 Old-age PENSION 31. Section 3 Disability PENSION 35. Section 4 Survivor PENSION 37. Section 5 Lump-sum Refund, Etc. 40. Section 6 Restrictions on Benefit Payment 42. CHAPTER FINANCIAL RESOURCES AND COLLECTION OF CONTRIBUTIONS, ETC. (Article 87 ~ 100) 44. CHAPTER NATIONAL PENSION FUND (Article 101 ~ 107) 50. CHAPTER REQUEST FOR INVESTIGATION AND REVIEW (Article 108 ~ 112) 56.

2 CHAPTER SUPPLEMENTARY RULES (Article 113 ~ 127) 57. CHAPTER PENAL PROVISIONS (Article 128 ~ 132) 62. ADDENDA 64. This English text is not official, in case of any diversions of interpretation, only the Korean text is official and shall prevail. - 3 - NATIONAL PENSION ACT. Wholly Amended by Act No. 8541, Jul. 23, 2007. Amended by Act No. 8635, Aug. 3, 2007. by Act No. 8728, Dec. 21, 2007. by Act No. 8852, Feb. 29, 2008. CHAPTER GENERAL PROVISIONS. Article 1 (Purpose). The purpose of this Act is to contribute to the stabilization of livelihoods and the promotion of NATIONAL welfare by providing PENSION benefits in case of old-age, disability or death.

3 Article 2 (Charge). The Minister for Health, Welfare and Family Affairs shall be in charge of the NATIONAL PENSION program under this Act. <Amended by Act No. 8852, Feb. 29, 2008>. Article 3 (Definitions). (1) The definitions of the terms used in this Act shall be as follows: 1. The term "employee" means a person (including directors and officers of a corporate body) who offers service, regardless of the type of occupation, in a workplace and whose livelihood depends upon the wages received in return for the service: Provided, that those who are determined by the Presidential Decree shall be excluded;. 2. The term "employer" means a business owner or a person responsible for management of the business.

4 3. The term "income" means earnings, not including tax-free income as determined by the Presidential Decree, gained by offering service for a specified period, or earnings, which necessary expenses are deducted from, gained by running a business and/or operating assets. In this case, the scope of the incomes depending on the category of the insured person under the NATIONAL PENSION Scheme - 5 - (hereinafter referred to as the "insured person") shall be determined by the Presidential Decree;. 4. The term "Average Monthly Income" means the annual average value of the Standard Monthly Income of all Workplace-based Insured Persons and Individually Insured Persons; the calculation formula for this is determined by the Presidential Decree.

5 5. The term "Standard Monthly Income" means the amount determined by the Presidential Decree on the basis of the insured person's monthly income for the purpose of calculating the amount of contributions and benefits. The calculation formula and effective period for it shall be determined by the Presidential Decree;. 6. The term "Workplace-based Insured Person" means any employee employed in a workplace and the employer of such workplace, who are insured under the NATIONAL PENSION Scheme under Article 8;. 7. The term "Individually Insured Person" means a person who is not a Workplace-based Insured Person, but who is insured under the NATIONAL PENSION Scheme under Article 9.

6 8. The term "Voluntarily Insured Person" means a person insured under the NATIONAL PENSION Scheme under Article 10, who is neither a Workplace-based nor Individually Insured Person;. 9. The term "Voluntarily & Continuously Insured Person" means a person whose insured period is less than twenty years but who is insured under Article 13(1);. 10. The term "contribution" means the financial resources for the NATIONAL PENSION program. In the case of a Workplace-based Insured Person, it means the combination of the employer's liability and the employee's contribution. In the case of an Individually Insured Person, Voluntarily Insured Person and Voluntarily &.

7 Continuously Insured Person, it means the amount contributed by the insured person. 11. The term "employer's liability" means the amount contributed by the employer of a Workplace-based Insured Person;. 12. The term "employee's contribution" means the amount contributed by a Workplace-based Insured Person; and 13. The term "workplace" means a place of business or office in which employees are employed. (2) In application of this Act, "Spouse, husband or wife" shall include any person who has a de facto marital relationship. - 6 - (3) A fetus of a person who is or was an insured person when he/she acquires eligibility for benefits under this Act shall, upon his/her birth, be deemed as a child whose livelihood depended on the person who is or was an insured person.

8 Article 4 (Valuation of Financial Equilibrium of NATIONAL PENSION and Adjustment of Benefits). (1) The standard of benefits and contributions under this Act shall be adjusted in order that the long-term financial balance of the NATIONAL PENSION may be maintained. (2) The Minister for Health, Welfare and Family Affairs shall calculate the balance of the PENSION finances every five years as determined by the Presidential Decree, make an overall plan concerning the NATIONAL PENSION operation, including a projection of finances, an adjustment of contributions, and the operation of the NATIONAL PENSION Fund, etc., obtain the President's approval after having it reviewed by the Council of NATIONAL Affairs, submit it to the NATIONAL Assembly, and make it public as determined by the Presidential Decree.

9 <Amended by Act No. 8852, Feb. 29, 2008>. (3) In the event of a significant change in the living standards, wages, prices and other economic conditions of the people, the amount of benefits to be paid under this Act shall be adjusted in accordance therewith. Article 5 ( NATIONAL PENSION Deliberative Council). (1) The NATIONAL PENSION Deliberative Council shall be established at the Ministry for Health, Welfare and Family Affairs in order to deliberate on the following subparagraphs concerning the NATIONAL PENSION program: <Amended by Act No. 8852, Feb. 29, 2008>. 1. Matters pertaining to the NATIONAL PENSION Scheme and its valuation of financial equilibrium.

10 2. Matters pertaining to NATIONAL PENSION benefits;. 3. Matters pertaining to NATIONAL PENSION contributions;. 4. Matters pertaining to the NATIONAL PENSION Fund; and 5. Other matters presented by the Minister for Health, Welfare and Family Affairs concerning the operation of the NATIONAL PENSION Scheme. - 7 - (2) The NATIONAL PENSION Deliberative Council shall consist of the chairman, vice- chairman, and members. The Vice Minister for Health, Welfare and Family Affairs shall be the chairman of the Council, the vice-chairman shall be elected from among the members representing public interests, and members shall be appointed or commissioned by the Minister for Health, Welfare and Family Affairs in accordance with the following criteria: <Amended by Act No.