Korean Pension Division in Divorces under Korean Law

Divorce in Korea raises complex legal questions regarding the division of real property, movable property, pensions, and retirement benefits. A recent decision by the Korean Constitutional Court has invalidated a pension-splitting formula under the Korean National Pension Act, ruling that this Korean law infringes on property rights. This landmark ruling by the Korean Constitutional Court has led to calls for legislative reform. For additional articles on Korean Divorce Law, please see: IPG Legal’s Divorce & Family Law Archive. The author of this article is the first non-Korean attorney to work for the Korean court system.

Korean National Pension Act, Article 64(1) (Division of Pensions)

Under Article 64(1) of the Korean National Pension Act, pensions were divided equally upon a Korean divorce based solely on the period of the marriage. The law overlooked whether spouses in Korea had actually cohabited or contributed to the marriage during the marriage, thus leading to the case being brought to the Constitutional Court of Korea and other courts throughout Korea.

For example, cases in Korea were decided to split pension assets in which spouses were separated for decades, and spouses abandoned their spouses. In some cases, Korean divorce cases were only filed as phishing expeditions to discover the amount of accumulated pensions.

Division of Pensions in Divorces under
Korean Law

Korean Constitutional Court’s Decision on Division of Pension Assets in Divorces under Korean Law

The Constitutional Court of Korea entered this debate with a landmark ruling a few years ago.

In Constitutional Court Decision 2019Hun-Ma413 (November 2023), the Court held that the provision violated the property rights of pension holders, reasoning that the law had a disproportionate impact, lacked fundamental fairness, and was, therefore, a legislative overreach. The Court emphasized that while Korean pension entitlements serve a public welfare/social function, these benefits remain closely tied to an individual’s work history and property interests.

1. Disproportionate Impact on Pension Holder: A spouse could be forced to share pension rights despite years of separation with no shared household. The Court considered the reality in situations where a spouse abandoned the pension holder, did not reside with the pension holder, and had never contributed to the family.
2. Lack of fairness: Equal division of Korean pensions, as an automatic right, failed to account for individual financial situations, caregiving contributions, and the financial situation at retirement.
3. Legislative Overreach: By disregarding actual marital circumstances, the rule amounted to an unconstitutional infringement on personal property rights.

Korean Legislative Reform Proposals

Following the ruling, the Korean National Assembly faces pressure to revise the National Pension Act of Korea. Lawmakers and scholars have proposed reforms, including:

1. Judicial discretion: Empowering courts to adjust pension division percentages based on fairness, mirroring Korean Civil Act Article 839-2 (property division upon divorce).
2. Cohabitation requirement: Excluding periods of mere legal marriage without cohabitation.
3. Broader scope: Addressing private pensions and annuities, which are becoming central in retirement planning.
4. Gender equity safeguards: Ensuring reforms do not disadvantage non-working spouses who sacrificed careers for caregiving.

IPG Legal

At IPG Legal, we advise clients on complex divorce, pension, and cross-border property division cases. Our attorneys are closely monitoring these reforms and can assist individuals in navigating this rapidly evolving legal landscape.

by Sean Hayes
Sean Hayes is a senior foreign attorney at IPG Legal, one of Korea’s leading international law firms. With over two decades of experience in Korea, he is recognized as the first non-Korean attorney to work for the Korean court system and one of the first to be appointed a regular member of a Korean law faculty. He is known for his aggressive advocacy and proactive street-smart advice. Sean is recognized as a top attorney for his work in Asia, and his firm is ranked as a top dispute resolution law firm, with a tier ranking in the leading legal rating services.

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at:  Schedule a Call with Attorney Sean Hayes.