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KMID : 0613620180380010396
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Health Social Welfare Review
2018 Volume.38 No. 1 p.396 ~ p.420
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Impact of the Relation between Population, Growth, Interest and Income on the National Pension Fund in Korea
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Kim Yong-Ha
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Abstract
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In the case of Korea’s National Pension, which has both funded and pay-as-you-go components, changes in the population, growth, interest rates, and income can directly or indirectly affect the reserves of the fund. I set up a population and national pension estimation model to simulate the changes in the National Pension fund according to the relative size of the population, growth, interest rate and income. As a result of the pension policy simulation, if the interest rate is higher than the income growth rate in the current National Pension scheme, the funding ratio becomes higher than the opposite case. If the income growth rate is higher than the interest rate, the contribution rate by pay as you go method will be lower than for the opposite case. As the population growth rate increases, the impact on the funding ratio gets smaller, while the contribution rate by pay as you go method is lowered. The effect of raising the contribution rate closer to the contribution rate by funded method will be more evident.
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KEYWORD
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National Pension, Pension Fund, Pension Finance, Population, Actuary
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