One in 5 public institutions falls short of legal retirement fund reserve requirements

One in five public institutions with defined-benefit retirement pension plans failed to meet the legal reserve requirement as of the end of last year. Three institutions — Bundang Seoul National University Hospital, the Korea Transportation Safety Authority and the Korea Road Traffic Authority — had reserve ratios below 50 percent.

Data submitted to People Power Party lawmaker Kim Wi-sang of the National Assembly's Climate, Energy, Environment and Labor Committee by the Ministry of Employment and Labor show that 45 of 214 public institutions — 21 percent — with defined-benefit retirement pension plans fell short of the legally required minimum reserve ratio of 100 percent as of end-2025.

Under a defined-benefit pension system, employers deposit and manage reserve funds at external financial institutions and pay workers a predetermined retirement benefit upon separation. The Act on the Guarantee of Workers' Retirement Benefits requires employers to maintain a minimum reserve sufficient to cover those payments.

Among individual institutions, Bundang Seoul National University Hospital posted the lowest reserve ratio at 43.61 percent. The Korea Transportation Safety Authority followed at 46.35 percent and the Korea Road Traffic Authority at 49.57 percent. The War Memorial of Korea (50.10 percent), the Korea SMEs and Startups Agency (59.29 percent) and the Korea Construction Machinery Safety Management Institute (59.80 percent) also came in below 60 percent.

Several larger public institutions also missed the legal threshold. The Korea Land and Geospatial Informatics Corporation was limited to 75.07 percent, while the Korea Veterans Health Service was limited to 78.83 percent. The Korea Federation of Small and Medium Business (85.33 percent), Korea Rural Community Corporation (85.61 percent), Human Resources Development Service of Korea (86.58 percent), Korea Trade-Investment Promotion Agency (90.12 percent) and Korea Environment Corporation (95.88 percent) also fell short.

"It is a serious case of fiscal negligence for public institutions funded by taxpayer money to fail to set aside retirement funds at the legally required level," Kim said. "Rather than simply blaming budget shortfalls, they must draw up a systematic reserve plan without delay."