January 14, 2022 12:14
Unless the National Pension Service undertakes drastic reforms, Koreans born after 1990 may receive no pensions at all when they reach retirement age, the Korea Economic Research Institute warned Thursday.
The institute analyzed OECD and Statistics Korea data and found that the NPS' consolidated balance will shift into the red in 2039 and run out in 2055.
The institute warned that the NPS is designed to collect lower payments from workers than their counterparts in France, Germany, Japan, the U.K. and the U.S. and pays out pensions earlier.
Koreans get their state pension starting at the age of 62 compared to 65 to 67 in the five countries. Now Korea intends to raise the age to 65, but the European countries are raising it to up to 75 this year.
The insurance premium in Korea is just nine percent compared to the average 20.2 percent among the other countries. That means Koreans pay W90,000 for every W1 million they earn, while Europeans pay W202,000 (US$1=W1,186).
The number of pensioners shouldered by every 100 workers in Korea is expected to rise five-fold from 19.4 in 2020 to 93.1 by 2050. Choo Kwang-ho at the institute, said, "Future generations are expected to shoulder huge burden to care for the elderly, but any attempts to reform the NPS keep getting delayed."
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