Retirement Plans
Types of Retirement Plans
What are the main types of retirement plans?
- There are three main types of retirement plans: defined benefit pension plan, defined contribution pension plan and individual retirement plan (Article 2(7) of Act on the Guarantee of Workers’ Retirement Benefits):

Defined benefit pension plan

Defined contribution pension plan

Individual retirement plan

▪ A retirement plan in which an employee receives a predetermined amount of benefits upon retirement.

▪ The employer makes contributions toward the employee’s retirement account and manages it.

▪ A retirement plan in which the employer makes a predetermined amount of contributions, corresponding to one-twelfth of the annual wage, to the employee’s retirement account.

 ▪ The employee manages his/her own retirement account and receives the sum of contributions and accrued investment earnings upon retirement.

A program allowing an employee to save retirement benefits received upon resignation or retirement in his/her individual savings account for his/her later years.