Excluded from the chairman of the association and the ex officio executive committee member
Election of the Steering Committee Chairman and Steering Committee members by direct and anonymous vote
Adjustment of the number of members for efficient operation of the steering committee (30 → 20)
Shortened term of office for member participation opportunities (3+α → 2+2 years)
Reporter Kim Deok-soo, the Korea Construction Newspaper = The operation method of the three construction-related mutual aid associations will be completely reorganized in 58 years.
The Ministry of Land, Infrastructure and Transport held the Construction Industry Innovation Committee (the 1st Vice Minister of the Ministry of Land, Infrastructure and Transport, co-chair of Seoul National University Professor Bok-nam Lee) and confirmed the management innovation plan for the three mutual aid associations (construction, specialized construction, machinery equipment) and the reorganization plan of the steering committee. Revealed.
The mutual aid association was established in the 1960s as a compulsory investment by construction companies in a situation where the financial function was insufficient, such as depositing construction deposits in cash at the client, and it is operated with a guarantee fee borne by the members.
In accordance with the Framework Act on the Construction Industry, investment in mutual aid associations is a prerequisite for registration and guarantee subscription in the construction industry, and construction contractors are obligated to fulfill the contract and sign up for defect repair guarantees in order to perform construction work.
Accordingly, the three mutual aid associations have grown into large financial institutions with a total investment of 12 trillion won, a guarantee scale of 146 trillion won, and an annual sales of 900 billion won, and have played a role in supporting the growth and stability of the construction industry in Korea.
■ Management innovation plan for mutual aid association
Accordingly, the Ministry of Land, Infrastructure and Transport-Mutual Aid Association-Association formed a T/F and prepared a plan for autonomous management innovation of the mutual aid association, such as branch reorganization plan, employee cost reduction, and investment efficiency.
◇ Branch reorganization plan
The three mutual aid associations decided to drastically reduce the number of branches.
In the case of construction deductions, the current 39 branches will be reduced to 34 branches by the end of this year, and 7 headquarters and 3 branches by June 2022.
Specialized deductions will be reduced from 32 branches to 28 in February 2022, and to 20 branches by February 2025.
Machine Mutual Aid, which is currently operating six branches, plans to reduce one branch first in June this year and three by February 2023.
◇Reduction of employee expenses
In the mutual aid association, it has been pointed out that even though sales of legally obligated products account for half of its profits, it has been pointed out that executives and employees receive excessive business expenses, incentives, and welfare expenses.
Accordingly, it was decided to drastically reduce the benefits of the union’s employees, taking into account the business characteristics of the mutual aid association and the level of other financial institutions.
The business cost is linked to sales, and the limit is managed at a reasonable level (0.3% of sales in 2022 and 0.25% by 2025), and transparency of execution management is strengthened.
For management at the level of public institutions,’Guidelines for the use of business expenses, etc.’ will be prepared, and external activity expenditures expenditure in cash will be recorded and will be consolidated and reduced by January 2025.
Incentives are paid when the prerequisites such as target rate of return for surplus funds and risk management are achieved through labor-management consultation, and the payment level is linked to profitability and rate of return exceeding the target.
Construction deductions are expected to decrease to a total of 35.8 → 17.4 billion won (△50%) when the incentives in 2020 are calculated based on the changed standards, and specialized deductions are expected to be reduced by more than 20%.
Welfare and benefits expenses will be reduced by 20% by 2025 by integrating duplicate items through discussions between labor and management, and abolishing items that are less timely, such as clothing costs.
For executive severance pay, the multiple of monthly pay is reduced from 1.5 to 3 times the existing one-fold, and annual compensation costs are significantly reduced in the number of days covered by labor-management consultations.
◇Investment efficiency improvement
It has been pointed out that although the large-scale surplus fund formed from member investment amounts to about 4 trillion won, the rate of return is too low compared to other annual funds*. <* 국민연금 수익률 11.31%, 공무원연금은 8.36%인 반면, 공제조합 수익률은 2~4%대>
Accordingly, the target rate of return was set at 5% by 2025, and in 2021, the minimum government bond (3 years) + 2.0% level was achieved according to the circumstances of each union.
To this end, the construction deduction plans to gradually increase the proportion of profitable assets investment from 2% in 2020 to 25% in 2021 and 50% in 2024.
<* 전문공제, 기계공제는 현행 80% 수준을 유지>
■ Steering Committee Reorganization Plan
The steering committee is reorganized for transparent and fair decision-making by mutual aid associations.
According to the Construction Act, the Steering Committee deliberates and decides on the basic policies of the association and supervises its execution.However, some mutual aid associations form a steering committee centered on the association’s president and the city’s president to address the important matters of the mutual aid association. During the decision, criticism was raised that the union was actually running.
Accordingly, it is obligatory to introduce direct and anonymous voting methods so that members can be elected fairly and objectively.
In this case, when only the president of the association, who is also a member of the association, retains an ex officio operating member, the rules for ex officio office of the association chairman are deleted in consideration of equity disputes with majority and minor exporters, non-member companies*, and regional representatives. < * 조합원 중 회원사 비율 : 건설공제 71.2%, 전문공제 64.2%, 기계공제 71.3%>
In addition, since the chairman in charge of the executive is subject to the supervision of the steering committee, the chairman is also excluded from the ex officio management committee for check and balance.
To enhance the professionalism of the steering committee, one of the chairman and vice-chairman of the steering committee is appointed as an expert, and for more members to participate, the term of office is shortened from 3 years (no consecutive term limit) to 2 years and limited to one consecutive term.
For efficient conference operation, the number of members is reduced from 30 to 20, and important matters such as approval by the Ministry of Land, Infrastructure and Transport are to be consulted in advance.
■ Future plans
The Mutual Aid Association’s management innovation plan will be initiated in earnest after approval by the General Assembly, and the reorganization of the steering committee will be implemented in April this year after the revision of the Enforcement Decree of the Construction Act.
Kwon Hyeok-jin, director of construction policy at the Ministry of Land, Infrastructure and Transport said, “As the Mutual Aid Association has played a strong support for the Korean construction industry, this reform is expected to become the rock for the next 100 years of the construction industry.” While closely monitoring the implementation process, he announced that he plans to take care to ensure that the mutual aid union reform can be completed without a hitch.
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