This study provides a comparative analysis of the pension systems of multiple, with an objective of determining implications for the legislative process on a national pension system in Korea.
Although lawmakers in Korea enacted legislation on the creation of a national pension system in 1973, the system has yet to materialize in practice. As the popular demand for both economic growth and welfare is rising, the Korean government has decided to launch the National Pension System into full operation by 1986, when the fifth Five-Year Economic Development Plan completed. There is growing concern that the pension system, enacted eight years ago, is no longer appropriate due to the significant economic and social changes that have taken place in Korea since. Some also point out the flaws and shortcomings of the pension system itself. This study provides a comparative analysis on the management, scope of application, benefit levels, eligibility criteria, and financing methods of the pension systems of various countries so as to provide Korean policymakers with information to improve and launch the Korean pension system.
As of 1979, there were 134 countries providing some form of social security to their citizens. Of these, 122 countries (91 percent) have adopted public pension systems as a means to guarantee a minimum income. Of these, 75.4 percent (92 countries) have adopted pension systems of the social insurance type akin to Korea’s National Pension System. Only 12 countries provide for occupational pension systems only, as does Korea today. The majority of these 12 countries are underdeveloped countries with a GNP per capita of less than USD 1,000.
The majority of social-insurance-type pension systems worldwide focus on benefitting employees by collecting contributions from both the management and employees, while the state provides for administrative expenses and shortages. The state monopolistically manages these pension funds every case. Many of these pension systems also aim to be an instrument of income redistribution, mixing wage-proportion and equality principles in deciding the amount of benefits to be paid. The three public pension systems currently in practice in Korea provide lump sums, calculated as a fraction of the participant’s wage. The National Pension System, on the other hand, is designed to be social insurance for all Korean citizens.
The comparative analysis of pension systems worldwide reveals flaws in the Korean National Pension System which require correction. Korean policymakers need to tailor the pension system to the specific needs and conditions of Korea, while also expanding the scope of the pension’s application to a larger segment of the population.
우리나라 연금제도의 문제점과 각국 연금제도의 동향분석(Issues in the current Korean pension system and an international comparative analysis)
|Journal Title; Vol./Issue||한국개발연구:vol. 4(no. 1)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Social Development < Social Welfare|
|Holding||KDI; KDI School|