The purpose of this study is to examine characteristics and current status of the National Pension System, and by comparing with developed countries’ cases, it seeks to improve the system more effectively.
In the beginning of the first stage, income of the pension fund was just above the expenditure; however, in the second stage, which is twenty years from the establishment of the National Pension System and when baby boomers (1960-70s) start to receive pension funds, expenditure became more critical as pension funds were widely distributed to the aged population. In the third stage, where baby boomers become aged, payment period will be longer and eventually, expenditure will be above the income. Considering Korea’s economic and financial status, pension funds should be managed in a way that increases profit through amplifying investment rate in the financial sector. This system is more effective and will contribute to stabilizing pension finance in a long-term.
The effects of a pension fund in the financial market can be summarized as follows; acceleration of stock market, extension of financial asset trading, and stabilization of investments. However, Korea’s financial market size is small when compared to the size of the National Pension Fund, and it will bring negative effect in institutionalizing the stock market. Major institutional investors such as investment trust company, insurance company, and stock firms must be fostered at the same time, and in parallel with development and expansion of capital, money and bond markets.
In order to minimize side effects, it is necessary to put limitation on quantity and quality of pension fund management and disperse investments. Also, when a large pension fund is managed in the financial market, basic principles and standards must be decided based on a long-term perspective, since yield structure and importance within finance structure has an impact on pension system. It is desirable that relevant regulations such as public enterprises’ investment vehicle, investment priority, and business entities should be included. Moreover, improvement in ways to take over funds and its conditions are needed, and may consider supporting mortgage fund as a part of investment business.
국민연금재정의 안정화를 위한 정책과제 및 방향
|Series Title; No||연구보고 / 90-14|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Social Development < Social Welfare|
|Holding||KDI; KDI School|