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The Korean pension system at a crossroads

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  • The Korean pension system at a crossroads
  • World Bank
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Title The Korean pension system at a crossroads
Similar Titles
Material Type Reports
Author(English)

World Bank

Publisher

[Washington, D.C.]:World Bank

Date 2010-05
Pages 71
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Social Development < Population
Social Development < Employment
Holding World Bank

Abstract

Old age income security in Korea is at a crossroads. The traditional system of family support is giving way to formal retirement savings - most of it mandated by government. Government employees and private school teachers are obliged to participate in special occupational schemes that operate on a pay-as-you-go basis while private sector workers must contribute to the partially funded National Pension Scheme. Employers must provide retirement allowances, a retirement cum severance payment program whose obligations are largely unfunded. These schemes have evolved over several decades and are not based on clear targets for the level of mandated retirement income or sustainable payroll tax burdens. They currently pay benefits to a minority of older Koreans. This means that over the next few years only social assistance programs will have a significant impact on the incomes of the current elderly poor. (The rest omitted)