Analysis of the preference on type of retirement pension for the seafarers in Korea

Abstract

The shortage of seafarers continues in the global shipping market. In particular, the retention of skilled officers has not been maintained. One of the reasons why the number of officers working on merchant ships is because of the working conditions onboard the ship. For instance, there are work-life balance, contractual employment, high workload and stress levels, insufficient shore leave, and career progression, and so on. Therefore, some public system is required for the seafarers to prepare for a stable life after they leave a ship while working on the ship to relieve anxiety. Among the many ways, the seafarer's retirement pension system is a practical and effective way to ensure a stable life for seafarers. The retirement pension system can be applied differently depending on the characteristics of the employees and companies that are subscribers, and their effects can also be different. So, in this study, we are intended to analyze what type of retirement pension seafarers prefer in Korea. Retirement pension is generally classified into defined benefit (DB), defined contribution (DC) and individual retirement pension (IRP). To survey the seafarers’ preference on retirement pension by type, six hypotheses were established using company variables and seafarer variables. Company variables include the type of business and the number of seafarers employed by shipping company while seafarer variables include the service term, age, type of duty (ship's officer, sailor), and annual wage of the seafarer. To verify the established hypotheses, the survey of the seafarers who are currently employed by the shipping company was carried out. A cross-tabulation analysis among the statistical analysis approaches was performed and the chi-squared statistic was calculated to validate the hypotheses. Consequently, the preference varied depending on the service term and age of the seafarers. That is, the shorter the service term and the younger, individual retirement pension which allows personal asset management was preferred while those who have longer service term and older-age tended to prefer defined benefit. The outcome of this study is expected to be useful for the shipping company to design the retirement pension system for seafarers. Ultimately, the introduction of a seafarer retirement pension system will contribute to the influx of skilled crews, the competitiveness of the shipping company, and reduced marine accidents.