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Collection of Retirement Benefit

Retirement benefit is to be paid when the employee retires.

The form of retirement benefit received when retiring is

  • 1) a lump sum of money that was accumulated in the retirement pension account and
  • 2) annuity for 5, 10 and 15 years or throughout lifetime.

When the employee receives retirement benefit,

  • 1) he/she can choose annuity if the age is 55 or older with
  • 2) at least 10 years of participation in the pension plan.
        (Those who meet the two requirements can collect money in a lump sum.)

Even if the above two requirements are not met, you can have annuity through the following measures.

Under the retirement pension plan, when an employee above 55 years old retires, the employee receives the retirement benefit from the retirement pension company and not from the company employed:

  • 1.

    Request Resignation

    If the employee requests for resignation

  • 2.

    Order retirement benefit payment
    (submit the employee retirement benefit request form)

    The company orders the pension service provider to pay the retirement benefit.

  • 3.

    Sell investment products

    The pension service provider sells the investment products operated in the employee’s DB or DC account

  • 4.

    Deposit retirement benefit

    It pays that amount as retirement benefit.

If any emergency funds are needed, in-service withdrawal or security loan are the only way to get money from retirement pension. In service withdrawal and security loan are only legally permitted for the following cases.

  • A participant who does not own a house purchases a house.
  • The medical treatment for the participant, his/her spouses or dependents who live together with the participant, or his/her spouses under Article 50.1 of the Income Tax Act is prolonged for six 6 months or longer.
  • Bankruptcy is declared against the participant under the Law on Debt Reorganization and Bankruptcy within 5 years if counted backward from the date when the security is offered (the date of in-service withdrawal request for in-service withdrawal)
  • A decision to commence individual debt reorganization procedure is entered against the participant under the Law on Debt Reorganization and Bankruptcy within 5 years if counted backward from the date when the security is offered (the date of in-service withdrawal request for in-service withdrawal)
  • Other cases such as natural disasters or national emergency, etc. which satisfy reasons and requirements set forth under the Decree of the Ministry of Employment and Labor.
  • It is withdrawing money from retirement pension account before retirement.
  • This is only possible with the reasons set out by law.
  • Different from in service withdrawal where you withdraw money from your own funds, you can have a loan secured against your retirement benefit from pension service provider.
  • Because it is a loan, there is loan interest.
  • The reason for secure loan is the same as in-service withdrawal, and up to 50% of the pension asset can be loaned.