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Video Description

Type: KIHASA Policy Featurette

Topic: No Depletion of Retirement Pension Funds

Guest Speaker: Professor Kim Woo-chang, KAIST

Transcript

Of course, only certain groups are currently enrolled in retirement pension plans. There are several conditions to be met in order to participate: first of all, you need to be an employee, and under current law, you have to work for a business with five or more employees, have been employed for more than one year, etc. But if we hopefully assume that at least 50% of all workers are enrolled in retirement pension plans, and if the system is well developed and expanded to cover everyone―and that's actually the direction retirement pensions should be headed―then the retirement pension fund won’t be depleted like the National Pension Fund, which pays out more than it takes in. Once the system reaches a point of balance, the funds accumulated in retirement pensions will continue to grow. Right? And after the final reform - extending retirement pensions to all workplaces, including those with fewer than five employees - is completed, and once a person who is 20 years old at the time reaches the age of 65, or let’s say 60, then the retirement pension fund will be able to balance its books. According to my calculations, it will stabilize at around 80% to 150% of GDP. Of course, it’s very sensitive to the specific structure of the system, but in the end, the fund will be much larger than the National Pension Fund.