National Pension Beneficiaries Hit 4 Million

- With beneficiaries reaching 3 million in number in 2010 and 4 million just four years later, the pension scheme is on its course toward 10 million in 2030. -

□ The National Pension Service (NPS), headed by Mr. Choi Kwang, announced on December 23 that its beneficiaries count has reached the 4 million mark in just twenty-seven years after its launch in 1988.

○ The one million mark was reached in 2003, followed by two million in 2007 and three million in 2010. Four years later, the number is now over four million.

○ Currently, more than 36% of Koreans aged at least sixty-one are receiving their National Pension benefits, and this significant share is said to be a manifestation of the National Pension system’s development into being a reliable social safety net for the Korean public at an age when people can live for as long as a hundred years.

* Population aged sixty-one and above: 8.48 million

* Pension recipients aged sixty-one and above: 3.08 million

□ Shin Dong Woo (61 years old, Bucheon, Gyeonggi), the beneficiary who hit the four-millionth mark, has been a workplace-based insured person for the past twenty-six years, from 1988 when the system was first introduced to November 2013 when he reached sixty. His contributions during 311 months totaled 69 million won, and, from December this year when he turns sixty-one, he would be receiving 1.23 million won monthly, which is inclusive of his Dependents’ Pension*.

* Dependents’ Pension: a benefit type having the feature of family allowance that is paid in addition to basic pension amount

○ It is calculated that Mr. Shin’s previous contributions will have been fully redeemed after just fifty-six months of benefit receipt. It is also estimated that receiving his pension for the next twenty-one years (which is the estimated period of his receipt based on the average longevity of today’s males aged sixty-one) would be translated into a total pension of 310 million won, which is 4.5 times higher than what he paid. When he passes away, Survivor Pension will be paid to his surviving family members**.

* Based on the 2013 Complete Life Table (Age-Specific) of the Statistics Korea

** Usually a spouse, a child (below age nineteen) or a parent who had been relying on the beneficiary for a living until his/her death

○ “When I was younger,” Mr. Shin said, “I thought it wasn’t worth contributing because I wasn’t sure if I would actually be paid back for what I was accumulating.” “Now I feel secure and so happy because I get pension every month just like when I used to receive monthly salaries before retirement,” he added.

□ As of December 2014, the cumulative number of National Pension beneficiaries recorded four million, which includes 3.24 million persons claiming Old-Age Pension, 140,000 claiming Disability Pension and 620,000 claiming Survivor Pension.

○ It is presumed that the number will increase rapidly as the National Pension system further matures, having reached 5.93 million by 2020, 7.99 million by 2025 and 10 million by 2030.

○ At the end of October 2014, insured persons with coverage period of at least twenty years received 870,000 won monthly on average and 1.7 million won at most.

○ The National Pension is a highly-secure scheme as it is the government that guarantees pension payment, and has the advantage of paying pension until a person’s death and raising pensions regularly in accord with inflation. It would therefore be wise for anyone to apply for coverage earlier in one’s lifetime and pay for as much and long as possible, to prepare for a more secure life after retirement.

□ On December 22, The NPS held an event to celebrate the record at its headquarters, and presented a certificate of benefit to Mr. Shin as he was the four-millionth beneficiary. At this occasion, people were encouraged to take continuous interest in the National Pension.

○ Mr. Choi, the chairperson, mentioned happily that “it was the support and trust of the twenty-one million insured persons and four million beneficiaries that enabled the growth of the National Pension system as a reliable system for old-age income security,” and expressed his organization’s commitment that “the NPS will continue to do its best to serve the public as a trustworthy partner in the second chapter of their lives.”