The retirement pension funding ratio at Doosan Enerbility(034020) came to just 39.76%, far short of the legal benchmark of 95%. The shortfall from the statutory minimum reserve alone exceeds 350 billion won. By contrast, Hanwha Aerospace ended last year below the benchmark at 75.82% but has since made additional payments to lift the ratio to 107%.
The government has begun its first regular labor inspection targeting establishments that failed to meet their duty to fund retirement pensions. The aim is to review funding shortfalls and strengthen protections for workers' rights to receive retirement benefits by imposing fines on establishments that violate legal obligations.
◇Short by 354.3 billion won versus the statutory minimum reserve… needs an additional 118.1 billion won
According to the Ministry of Employment and Labor (MOEL) and others on the 11th, Doosan Enerbility's funding ratio for its defined benefit (DB) retirement plan stood at 39.76% at the end of last year. Doosan Enerbility had 233.8 billion won in retirement assets deposited with external financial institutions, equal to 39.76% of the statutory minimum reserve of about 588.1 billion won.
That leaves an estimated shortfall of about 354.3 billion won from the statutory minimum reserve. Under current rules, it would need to contribute about 118.1 billion won more to eliminate one-third of the shortfall.
By law, establishments operating DB-type retirement plans must deposit the funds needed to pay employees' retirement benefits with external financial institutions. In a DB plan, the benefit level workers receive at retirement is set in advance, and the company bears responsibility for managing the fund. If the fund falls below 95% of the statutory minimum reserve, the shortfall must be resolved within a set period.
Doosan Enerbility paid fines this year for failing to meet its retirement pension funding obligations. A company official said the shortfall has persisted due to the lingering effects of past management difficulties and added that the company plans to eliminate the gap in stages each year.
◇Management crisis that went as far as creditor control… Doosan: "Limited capacity to fund; will resolve gradually each year"
Doosan Enerbility's underfunded retirement plan is tied to years of management troubles. Its predecessor, Doosan Heavy Industries, suffered weak orders and deteriorating finances amid a global power market slump and uncertainty in its nuclear business stemming from the Moon Jae-in administration's nuclear phaseout policy.
In June 2020, it entered creditor control after signing an agreement to improve its financial structure with the Korea Development Bank and the Export-Import Bank of Korea, and it graduated from creditor management only in February 2022 after carrying out a self-rescue plan worth about 3 trillion won. A business community source said, "At the time, the funding capacity for the retirement plan was limited due to management difficulties, and that impact continues today."
◇Labor ministry to inspect 500 establishments including Doosan Enerbility… fines for noncompliance
The Ministry of Employment and Labor (MOEL) is conducting focused inspections in the third and fourth quarters this year on whether the top 500 establishments with underfunded retirement plans are meeting the legal funding standards for DB plans. This is the first time compliance with retirement pension funding obligations has been included in regular labor inspections.
The labor ministry plans to impose fines on establishments that fail to make up shortfalls within the statutory deadline, regardless of whether they submit a corrective plan. Even if an establishment files an improvement plan, fines for the legal violation will be imposed separately.
A labor ministry official said, "Even if an improvement plan is submitted during the corrective order process, fines will still be imposed separately" on establishments that do not meet the funding obligation within the legal deadline.
