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The South Korean government has decided to make private pension plans mandatory.
Beginning in 2016, businesses with 300 or more employees will have to provide retirement pensions to their employees. This requirement will gradually be extended to all businesses by 2022.
“This will allow employees to enjoy the superior benefits of retirement pension plans, compared to the severance pay they are receiving now, and the government is looking into ways to ensure that this mandate does not place an undue burden upon businesses,” according to a government statement.
About 15.6% of companies currently offer a private plan to their employees.
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