According to a report by the Korea Labor Institute titled "Estimation and Characteristics of the Retirement Benefit Blind Spot," approximately 471,400 out of 22,143,000 wage workers, or 21.3%, were estimated to fall into this category as of 2024.
The retirement benefit blind spot refers to workers who are excluded from the coverage of the Employee Retirement Benefit Security Act or those who, while legally covered, do not actually receive retirement benefits. This includes workers who work less than 15 hours a week, those with less than one year of continuous employment, and those on repeated short-term contracts.
The proportion of workers in this retirement benefit blind spot has decreased from 26.6% in 2015. However, it still means that more than one in five wage workers lacks protection for retirement benefits.
Historically, a significant portion of the blind spot was due to "substantial blind spots" where employers failed to properly implement the system despite it being applicable. Recently, however, there has been an increase in "institutional blind spots" where workers do not meet the legal requirements for retirement benefits from the outset.
Women make up more than half of those in the blind spot, influenced by a labor market structure characterized by career interruptions, part-time work, and short-term contracts.
By age group, those aged 60 and older represent the highest proportion at 37.1%, followed by youth aged 15 to 29 at 23.9%. This trend is attributed to the high prevalence of part-time and short-term jobs among older workers and the instability faced by young workers entering the job market.
Industries such as health and social welfare services, accommodation and food services, and wholesale and retail trade show a high proportion of workers in the blind spot. These sectors often have many small businesses with short labor contracts and frequent job changes.
Critics argue that addressing the retirement benefit blind spot cannot be viewed solely as an issue of regulatory enforcement. With the changing structure of the labor market leading to an increase in workers outside the legal application criteria, there is a need to reassess the scope of the system.
As the labor market rapidly evolves due to aging, the rise of platform work, and an increase in ultra-short-term employment, it is crucial to improve the retirement benefit system to ensure it serves as a fundamental mechanism for securing income in old age. The Korea Labor Institute stated, "It is necessary to enhance the effectiveness of legal rights to retirement benefits while providing institutional support for workers who are not currently protected under existing criteria. We should discuss ways to redesign the boundaries of retirement benefit applicability."
* This article has been translated by AI.
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