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KMID : 1124020000160010179
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Korean Social Security Studies
2000 Volume.16 No. 1 p.179 ~ p.205
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A Study on the Availability of the Reserve Funds of the National Pension Scheme for Guaranteeing the Old - age Income
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Lee Jung-Woo
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Abstract
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Since its introduction the national pension system(NPS) in Korea has been an object of mistrust from many people. Thus the reform of the NPS has been a persistent agenda in political debate. The growing pressure to reform the NPS has come about primarily from its financial difficulties. Under this situation the strategy to solve this problems has been focused mainly on building up more reserve funds. The purpose of this paper is to examine whether or not the reserve funds of the NPS have their own role to guarantee the income security for the old-aged. Two main financing systems, the funded system and the pay-as-you-go system, are theoretically analysed in relation with the socio-economical circumstances. The results suggest a number of conclusions. These can be summarized as follows: - The NPS under the pay-as-you-go basis can not sustain the burden of demographic aging. - The funded System also can not be an adequate alternative to cope with the demographic burden in many aspects: the existence of huge amount of reserve funds and the negative impacts to economy in the course of managing the capital etc. - The transformation to the partial funded system which has only relatively small amount of reserve funds to meet some periods(e.g. 3∼5 years) of liability is suggested. And the rest of reserve funds should be spent to solve the present problems, such as the income support for the elderly and the family assistance policies.
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