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More than 3 Million Receive Benefits
from National Pension
By
Geechang Lee, Suhyun Song, Soyoung Chung,
Maeil Business Newspaper
September 28, 2010
South Korea
The number of recipients of the national pension fund exceeded three million for the first time in 22 years since the introduction of the national pension. Meanwhile, the number of people who pay contributions kept declining to reach a new low this year, sending signs of alarm to fiscal soundness of the national pension system.
Only about 200,000 Koreans could be beneficiaries of the national pension in 1998, but that number climbed significantly every year, surpassing three million as of September 2010. In other words, 766 people a day received the money since 2007. A senior citizen in his or her sixties currently receives 770,000 won on average every month if the recipient consistently paid contributions for more than two decades.
The Ministry of Health & Welfare forecast the number of recipients will rapidly increase as the aging population accelerates in the years ahead. By 2050, about 21.19 million people, or half of the entire population (an estimated 42.34 million) will be eligible for the national pension fund.
Meanwhile, national pension revenues are predicted to be on a consistent decline.
The Welfare Ministry expects the number of subscribers to the national pension will reach its peak, 18.8 million in 2010, and then sharply fall to 12.02 million by 2050. The ministry is pessimistic about financial health of the national pension, projecting that the fund will run out around the year 2060 if the current trend continues.
Yoo Byung-gyu, head of economic research center at Hyundai Economic Research Institute (HERI) said, “the number of subscribers dwindles, while the number of recipients increases in the course time. It is a warning sign that financial management is needed for the national pension.”
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