01. General Status

Basis of Establishment and Major Functions

Basis of establishment

Article 9 of The Act on the Improvement of the Employment Conditions, etc. of Construction Workers

The Construction Workers Mutual Aid Association was established with the aim of improving the employment conditions of construction workers and promoting their welfare through programs related to mutual retirement aid and vocational skills (Approved in December 1997 by the Minister of Employment and Labor).

nder the current arrangement, employers pay retirement mutual aid by installments per period of employment of their daily hire employees each month. The Construction Workers Mutual Aid Association ("the Association") retains and increases the amount through investment and pays a mutual aid retirement fund to retiring workers.

Construction projects subject to payment of mutual retirement aid funds

Public work projects amounting to 260 thousand USD or more; private work projects amounting to 8.73million USD or more; apartment and one-room studio (commonly known as "offi cetels") projects for 200households or more.

Eligible workers

Temporary/daily hire construction workers hired for a project covered by the Program under an employment contract whose period is less than one year.

Major functions

Major functions

History

History

Development of the retirement mutual aid system for construction workers

Development of the retirement mutual aid system for construction workers
Category Jan. 1998 Aug. 2001 Apr. 2004 Jan. 2007 Jan. 2008 Sep. 2010
Projects Public 8.73 million
USD or more
4.36 million
USD or more
0.87 million
USD or more
- 430 thousand
USD or more
260 thousand
USD or more
Private Apartments
with 500
households
or more
- Apartments
with 300
households
or more
- Apartments
and oneroom
studios
(officetels)
with 200
households
or more
8.73 million
USD or more
Amount of fund
paid per day
1.75 USD - - 2.62 USD 3.50 USD -

※Note ) Amount of dues for institution operation: 0.09 USD per day until March 2012, 0.17 USD thereafter

Relevant Laws

Relevant Laws
Relevant laws Major contents
1. The Act on the Improvement of the Employment Conditions etc. of Construction Workers
(Relevant agency: The Ministry of Employment and Labor)
  • The Law provides the basis for the establ ishment of the Association.
  • Ipso facto subscription to the Program and payment of mutual aid by installments
  • Retirement mutual aid money and such like
2. The Framework Act on the Construction Industry
(Relevant agency: Ministry of Land, Infrastructure and Transport)
  • The Law sets forth the scope of construction works for which ipso facto subscription to the Program is required, with retirement mutual aid ins-tallments reflected in the cost.
  • Preferential treatment is granted to employers who subscribe to the Program.

Organization and number of personnel

Organization

Organization

Designated number of staff

  • Designated number of staff : 97 / Current number of staff : 97
Relevant Laws
Category Total Directors Grade-1 Grade-2 Grade-3 Grade-4 Grade-5 Grade-6 Grade-7 Etc
Designated
number of
staff
116 3 5 9 14 21 29 25 10 0
Current
number of
staff
94 2 4 9 12 20 20 18 8 1

02. Major Programs

The Retirement Mutual Aid Program

The Program

  • Under the current arrangement, employers pay retirement mutual aid by installments as per the period of employment of their daily hire employees each month.
  • The Association retains and increases the amount through investment and pays mutual aid retirement money to workers upon their retirement. As of the end of July 2015, a total of 4.42 million construction workers had registered with the Program. So far, the Association has paid a total of 612 million USD in mut

Construction workers covered by the Program

  • Daily hire construction workers hired for a project covered by the Program under an employment contract whose period is less than one year
Construction projects whose subscription to the Program is mandatory under the Law

Projects requiring ipso facto subscription

  • A state or local government project amounting to 260 thousand USD or more
  • A private investment-based project amounting to 260 thousand USD or more
  • A private project amounting to 8.73 million USD or more An apartment or one-room studio (called offi cetels) project for 200 or more households

Projects for which subscription is optional

  • All construction projects not covered by the aforesaid categories, and for which the employer may or may not choose to subscribe to the Program

Payment of retirement mutual aid money

  • The Association pays the aid money (including the accumulated interest) to a construction worker who is either retiring or deceased and for whom installments have been accumulated for 252 days* or more.
    * (21 days x 12 months =252 days)

Relevant handling procedure

Relevant handling procedure

System of program operation

System of program operation

Asset Management

Amount of retirement mutual aid installments managed

2.435 billion USD (as of the end of July 2015)

Principles of asset management

  • The Association manages assets in a transparent and effective manner according to the following four principles.
Relevant Laws
Category Emphasis
Stability Minimization of risk of loss in consideration of asset volatility
Liquidity Emphasis on smooth payment of retirement mutual aid money
Profitability Maximizing profits through investment of retirement mutual aid money
Publicness Management with consideration given to ripple effects on the domestic financial market

Status of asset allocation

Based on average balance / Unit: %

Status of asset allocation
Category 2013 2014 2015.06
Short-term funds 12.1 6.4 8.8
Bonds 70.6 75.3 76.9
Stocks 6.2 7.7 5.8
Alternative investments 11.1 10.6 8.5

Strengthened expertise of asset management

  • The Risk Management Team is operated independently of other departments to ensure more efficient risk management of invested assets.
  • Operation of committees composed of external experts (including professors, researchers, and accountants, etc.) at each stage of asset management

The committees-related to asset management

The committees-related to asset management
Category Matters handled by committee
Asset Management
Committee
  • Matters concerning asset management policies and strategies
  • Deliberation of major issues
Investment Committee
  • Deliberation of individual investment cases
  • Selection of relevant financial institutions/products and alternative investment products
Risk Management
Committee
  • Matters concerning risk management policies and strategies
  • Appraisal of results of asset management

Employment and Welfare Programs

Employment and Welfare Programs

03. Status of Major Programs

Retirement mutual aid As of the end of July 2015

Retirement mutual aid

Asset management As of the end of July 2015

Asset management

Employment and Welfare As of the end of July 2015

Employment and Welfare