The most distinctive feature of DC(Defined Contribution) plan is that ‘the employee increase pension asset by investing in products.
When signing up for a DC plan, a DC account opens to individual employees, and
the company regularly (monthly/quarterly/annually etc). makes contribution
payment to the DC accounts.
With the help of the pension service provider, the employee invests the pension
asset in different products in different ratios according to the style and
Therefore, even in the same company with the same DC plan, the amount of
employee's retirement benefit varies depending on the investment result.
The company pays contribution of at least 1/12 of annual total salary to the employees's DC account.
DC participants can make additional contribution, and the additional contribution amount can be deducted from taxable annual income (up to 4,000,000KRW including personal annuities)
The employee's retirement benefit amount varies depending on how the employee invests the pension asset.
In case the participant retires before 55, the retirement benefit is transferred to IRP automatically and can be continuously managed until the participant wants.
In case the participant retires after 55, he/she can choose lump sum or annuity.