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Reshaping the retirement pension system to fit the needs of Korea's aging population

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Frame of Image g, and to make the now voluntary retirement pension system compulsory. Also, entry/exit requirements for retirement pension providers should be specified for operation management and asset management services to stem excessive market entry, and pension providers' duties must be elucidated in supervisory rules to secure market order. Finally, standards for disclosing returns need to be more detailed and the intervals more frequent, and supervisory authorities need to be able to regularly monitor and sanction improper business conduct.
* Opinions expressed are those of the author and do not necessarily reflect the official positions of the Korea
Institute of Finance.
Korea's Aging Population & its Three-Tiered Pension System
K o re a h a s b e e n experiencing rapid aging, yet its threetiered pension system remains immature.
Korea has already become an 'aging society,' with 10.7% of the population over 65 as of the end of 2009. Moreover, this figure will reach over 14% in 2018 as Korea becomes an 'aged society'. This transition from an aging to an aged society will have taken 18 years, versus 24 for Japan, making it the most rapid worldwide. Currently, most of the economic and social risk factors facing Korea are directly or indirectly linked to its low birth rate and rapidly aging demographic. Future discussions on issues such as declining potential growth, the accumulation of fiscal deficits, youth unemployment, falling real estate prices, and household debt cannot leave out


Full Text
Title Reshaping the retirement pension system to fit the needs of Korea's aging population
Similar Titles
Material Type Reports
Author(English)

Kim, Byung Duk

Publisher

Korea Institute of Finance

Date 2010-11
Journal Title; Vol./Issue Weekly Financial Review:19/42
Pages 7
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Social Development < Social Welfare
Government and Law < Public Administration
Holding Korea Institute of Finance

Abstract

Korea's rapidly aging population demands that the retirement pension system be bolstered. This will require greater tax incentives than the government's currently proposed tax reforms. It would also make sense to introduce both retirement pension schemes for small business workers who have been left out of retirement planning, and to make the now voluntary retirement pension system compulsory. Also, entry/exit requirements for retirement pension providers should be specified for operation management and asset management services to stem excessive market entry, and pension providers' duties must be elucidated in supervisory rules to secure market order. Finally, standards for disclosing returns need to be more detailed and the intervals more frequent, and supervisory authorities need to be able to regularly monitor and sanction improper business conduct.