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KMID : 1001320220490030063
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Social Welfare Policy
2022 Volume.49 No. 3 p.63 ~ p.86
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Estimation of the burden rate of the national pension system
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Won Chong-Hyun
Park Na-Ri
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Abstract
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The pension finance crisis due to the high-return and low-burden of beneficiaries mentioned in previous studies is limited to the position of the insured. Financial stability needs to be considered based on the burden and income of the system operator who will be responsible for the sustainability of the actual system. The question arises as to whether the subscriber’s profit costs will lead to the burden the system has to bear. Therefore, from the perspective of the system operator who is responsible for system sustainability, the burden on one subscriber can be reduced through fund management to estimate the system’s earning=burden ratio.
The revenue cost recognized by each individual subscriber is very different from the cost burden felt by the system operator, and the cost per subscriber is significantly lower than the revenue cost due to fund management. This is because the attribution of benefits from fund management appears to be different between the cost of profit and the cost of burden. It is difficult to point out that the high profit ratio per member is the main cause of pension financial instability. The problem of intergenerational imbalance should be viewed as the cause, not of the individual’s cost of income, but of the marked difference in the support cost in the national pension reflecting the method of payment.
Therefore, future generations who join after the system reorganization is completed may suffer losses from not enjoying the operational effects of the insurance premiums paid depending on the existence of the fund. Onedimensional solutions such as raising insurance premiums or lowering salaries while leaving other system variables as it is for the reason of improving profit ratio may cause the system to exploit the contribution of future generations.
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KEYWORD
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Korean national pension, income cost, burden cost, internal rate of return, financial stability, fund burden
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