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KMID : 1001320150420020087
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Social Welfare Policy
2015 Volume.42 No. 2 p.87 ~ p.111
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The Effect of Retirement Age Extension on the Old-age Income and Policy Recommendation
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Kim Jin-Soo
Nahm Jae-Wook
Jung Chang-Lyul
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Abstract
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This study explores how the retirement age extension affects workers’ old age income - focusing on the National Pension Scheme(NPS) and occupational pension. It makes use of hypothetical risk biographies’ method, examining 6 different worker’s groups. The results are summarized as follows. First, the retirement age extension will increase workers’ old age incomes in every group. The benefits in the NPS are likely to increase more in labour market insiders than outsiders because of seniority wage system. The introduction of salary peak system may offset the effects, which depend on its reduction rate. The occupational pension is likely to increase more in the latter than the former. However, it is just due to its immaturity, so that the seniority wage and salary peak will be more important as in the NPS. Second, the retirement age extension will give employers financial burden, but also be affected by the seniority wage and salary peak system. Employers’ burden can depend on policy intervention, which can increase less and even decrease while workers’ old age incomes always increase. Therefore, it is important to arrange the appropriate follow-up policies such as salary peak system or exemption of occupational pension contribution in extension period for the sake of the successful introduction of retirement age extension.
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KEYWORD
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Mandatory Retirement System, National Pension Scheme, Occupational Pension, Employment for the aged, Hypothetical Risk Biographies
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