Rapid Ageing and Old-Age Income Security in Korea

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AbstractThe Korean old-age income support system is at a crossroads. The population is ageing rapidly and the public pension schemes are facing bankruptcy. Proposals to downsize the National Pension Scheme have been held up in the National Assembly by political parties who have argued for multi pillar arrangements as advocated by the OECD and the World Bank. However, with the recent passing of legislation to allow the conversion of retirement allowances to private pensions, many commentators believe that a better approach would be to covert the current National Pension Scheme from a ‘low contribution-high benefit’ scheme to an adequate contribution-adequate benefit scheme. For the future of the nation, reform of the pension system is urgent and inevitable.